Ahmedabad Fake Billing Scam: Three Arrested in Massive Rs 262 Crore GST Fraud Cases
In a significant crackdown on tax evasion, authorities have arrested three individuals in Ahmedabad in connection with two separate fake billing cases involving fraudulent claims of Input Tax Credit (ITC) amounting to over Rs 262 crore. The Directorate General of GST Intelligence (DGGI) has been investigating these sophisticated operations that spanned multiple cities and sectors.
Major Rs 252.6 Crore Fake Invoicing Racket Uncovered
The first and larger case involves a massive fake invoicing racket with fraudulent ITC claims of approximately Rs 252.6 crore at a taxable value of Rs 1,403.66 crore. Over the past two months, coordinated searches were conducted at multiple premises across Ahmedabad, Jamnagar, and Mumbai, leading to the recovery of substantial incriminating evidence including documents, digital records, and mobile devices.
Investigations revealed that several non-existent and non-operational private limited companies were established using dummy directors. These entities showed bogus turnovers running into hundreds of crores within just months of their formation. DGGI officials confirmed that these firms issued fake invoices without any actual supply of goods or services, creating a complex web of fraudulent transactions.
Sophisticated Modus Operandi Across Multiple Sectors
The fraudulent invoices were strategically used across various sectors including iron and steel, chemicals, cement, agriculture, and construction. According to DGGI officials, recipient firms utilized these bogus documents to artificially inflate their turnovers while simultaneously defrauding the government exchequer by offsetting legitimate GST liabilities through fake ITC claims.
Sources indicate that the syndicate employed sophisticated methods to lend legitimacy to their operations. They allegedly routed invoice amounts through RTGS (Real Time Gross Settlement) systems, creating a veneer of legitimate transactions. Subsequently, the money—minus commissions—was returned in cash through hawala channels, effectively laundering the proceeds of the fraud.
Key Masterminds and Their Operations
DGGI investigations uncovered that 17 GST-registered firms were controlled by Ahmedabad resident Rizwan Khoja, who allegedly masterminded the entire operation. Khoja reportedly used associates, staff, relatives, and even unsuspecting individuals to execute the scam. To maintain centralized control while evading detection, he provided mobile phones to all involved persons and replaced these devices at regular intervals to avoid scrutiny.
Another accused, Lalit Jain, acted as a broker facilitating the sale of fake invoices to industry players in exchange for commissions. Both Khoja and Jain were arrested on January 22 under Section 69 of the CGST Act and remanded to five days' custody. So far, six persons have been arrested in connection with this particular case.
Second Case Involving Rs 9.29 Crore Fraud
In a separate but related case, the key controller of M/s Rajanji Entreprise, Memon Mohamadafwan, was arrested on January 20 for allegedly availing fake ITC worth Rs 9.29 crore. This fraud was executed through bogus bills totaling approximately Rs 52 crore issued by 27 fictitious entities. Mohamadafwan has been remanded to 14 days' judicial custody as investigations continue.
Connection to Previous Major Scam
This latest crackdown appears to be a follow-up to an earlier massive fake billing scam involving Rs 800 crore with fraudulent ITC claims of Rs 162 crore. In that case, Ahmedabad resident Ritesh Shah was arrested by DGGI in December 2024. Shah was subsequently taken into custody by the Enforcement Directorate in Mumbai and remains in judicial custody, indicating the seriousness and scale of these interconnected fraud operations.
Ongoing Investigations and Future Actions
Forensic examination of seized digital devices is currently underway to identify all beneficiaries of the fake bills. DGGI officials have emphasized that further scrutiny of recipients of these fraudulent invoices will continue, with strict legal action promised against all violators. The agency remains committed to uncovering the full extent of these sophisticated tax evasion networks that have been operating across multiple states and sectors.
The arrests highlight the ongoing challenges in combating organized tax fraud in India's GST system and demonstrate authorities' increasing vigilance against such sophisticated financial crimes that ultimately deprive the government of legitimate revenue.
