Noida, November 11, 2025:
The Directorate General of GST Intelligence (DGGI) has unearthed a massive ₹350 crore GST refund scam involving a network of fake firms operating out of Noida and nearby regions. The fraudulent network allegedly created bogus invoices and claimed input tax credit (ITC) on non-existent exports, siphoning off crores in illegal refunds.
How the Scam Worked
Preliminary investigations revealed that the accused entities registered multiple shell companies using forged Aadhaar and PAN details. These fake firms issued fake purchase and sales invoices to each other, creating a paper trail of transactions without the movement of actual goods.
By showing false exports and inflated turnover, the culprits claimed GST refunds and input tax credits from the government under the guise of legitimate business activity.
Key Findings by DGGI
- More than 70 fake firms were detected so far.
- The total fraudulent ITC and refund claims are estimated at ₹350 crore.
- Several bank accounts and digital payment wallets linked to these firms have been frozen.
- One mastermind and two accomplices have been arrested under provisions of the CGST Act for creating fictitious entities and availing fraudulent refunds.
What This Means for Taxpayers
The incident once again highlights the growing misuse of GST registration facilities and the urgent need for strict verification of credentials during registration. Genuine taxpayers are urged to verify their vendors’ GSTINs and return filing status before entering into business transactions to avoid complications.
Government’s Next Steps
The DGGI and GST Network (GSTN) are reportedly strengthening data analytics to detect suspicious refund patterns and cross-verify export data with customs records. The authorities also plan to tighten Aadhaar authentication and KYC norms for new GST registrations.
Expert View
Tax professionals suggest that while automation has streamlined compliance, fraudsters are exploiting loopholes through digital manipulation. “Every such crackdown sends a strong message that fake invoicing and refund scams will not be tolerated,” said a senior tax consultant.
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