The 645 Crore GST Fake ITC Scam How DGGI Exposed the Mastermind

India’s tax system has been rocked by one of the biggest GST frauds in recent memory. The Directorate General of GST Intelligence (DGGI) has uncovered a massive Input Tax Credit (ITC) scam worth nearly ₹645 crore, leading to the arrest of the alleged mastermind, Mukesh Sharma.

This case highlights the growing menace of fake invoicing rackets that threaten the integrity of the GST framework and drain the national exchequer.

The Anatomy of the Fraud

• 229 Fake Companies: Sharma allegedly created a web of dummy GST-registered firms, existing only on paper.
• Invoices Without Supply: Fraudulent invoices were issued without any actual goods or services being supplied. These were then used to claim fake ITC.
• Active Management: Evidence shows Sharma personally managed registrations, filings, and banking transactions for these shell firms.

The Money Trail

The fraud wasn’t limited to tax evasion. Investigators suspect that the illicit funds were routed through an NGO and a political outfit, pointing to a money-laundering angle. This suggests the scam was designed not only to evade taxes but also to generate and circulate black money.

DGGI’s Crackdown

• 162 Mobile Phones: Likely used for OTPs linked to GST and banking.
• 44 Digital Signatures: Tools to legitimize fake filings.
• 200+ Cheque Books: Connected to dummy firms for circular fund flows.

On November 11, 2025, Mukesh Sharma was arrested under the CGST Act, 2017. He faces charges under Sections 132(1)(b) and 132(1)(c), which cover issuing fake invoices and availing wrongful ITC. Since the fraud exceeds ₹5 crore, the offences are cognizable and non-bailable.

What This Means for Honest Businesses

This landmark case sends a strong message: tax authorities are tightening their grip on GST fraud using intelligence and technology.

For genuine taxpayers and compliant businesses, scams like these create unfair competition and strain government finances. The ongoing investigation aims to expose the wider network of firms and individuals involved, signaling that the crackdown on GST fraud is only intensifying.

Takeaway

The ₹645 crore GST scam is a wake-up call for businesses across India. While authorities are stepping up enforcement, it’s equally important for companies to stay compliant and vigilant. Fake invoicing may look like easy money, but the consequences are severe — both legally and financially.

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