In a significant financial fraud case, Swastik Traders allegedly defrauded the Central Goods and Services Tax (CGST) department of ₹5.96 crore over the past ten months by filing fake Input Tax Credit (ITC) claims. The company’s directors, who are accused of pocketing the entire sum, are currently on the run.
The CGST department uncovered the fraud during an investigation at the company’s registered address, only to discover a residential property with no signs of business operations. A manhunt has been launched to locate the absconding directors.
Modus Operandi
Swastik Traders, registered with the CGST department on January 15, began issuing fraudulent invoices shortly thereafter to claim fake ITC benefits. The scam came to light during a routine departmental audit, but by that time, the directors had already siphoned off the funds.
The company had listed Bharatwada and New Hanuman Nagar as its business locations. However, during inspections, CGST Commissionerate-2 officials found one location to be an unoccupied house with no commercial activity. Reports indicate that the property was rented, complicating efforts to trace the suspects.
Frequent ITC Frauds
CGST officials stated that similar cases of fraud have surfaced in the past, with fake companies exploiting ITC loopholes to embezzle large amounts. Internal sources revealed that such scams cause significant financial losses to the exchequer. However, in many cases, authorities refrain from filing police complaints or involving external agencies, inadvertently allowing fraudsters to repeat their crimes.