GST Fraud Case Akola: Trader Arrested for ₹9.97 Cr Scam
A shocking GST fraud case in Akola has surfaced with the arrest of a trader for generating fake invoices worth ₹9.97 crore. The case highlights how GST evasion through bogus firms and fraudulent Input Tax Credit (ITC) continues to challenge tax authorities.
Let’s break it down for Indian taxpayers and small businesses—how these scams work, what the law says, and how you can stay on the right side of GST.
What Happened in the Akola GST Fraud Case?
As per the Maharashtra GST Department, a trader operating under a fake identity was caught issuing bogus invoices worth ₹9.97 crore to avail and pass on fraudulent ITC. The accused created shell firms to:
- Generate fake bills without any actual supply of goods or services
- Illegally claim Input Tax Credit
- Transfer ITC to other taxpayers in exchange for commission
The arrest was made under Section 132 of the CGST Act, 2017, which deals with offences involving fraud and tax evasion.
Legal Angle: What Is Section 132 of CGST Act?
Here’s what you should know:
| Offence | Punishment under Section 132 |
|---|---|
| Fraudulent ITC claim over ₹5 crore | Cognizable and non-bailable offence |
| Fake invoice without supply | Up to 5 years imprisonment |
| Creation of shell firms | Treated as criminal conspiracy |
| Repeat offence | Stricter penalties, denial of bail |
👉 In the Akola case, the threshold of ₹5 crore was crossed, triggering arrest without warrant.
Source: CGST Act – Section 132
How Fake ITC Frauds Typically Operate
Fraudsters often set up multiple fake firms and use Aadhaar-linked GST registration to get GSTINs.
Red flags include:
- No real business premises
- No movement of goods
- ITC claimed within days of GST registration
- Large input credit with no output sales
Expert Tip: Don’t Get Trapped via Third-Party Vendors
CA Sanjay Vyas warns:
“Many small businesses unknowingly buy goods or services from fake vendors. If the supplier’s GST compliance is poor, your ITC claim can be denied.”
How to safeguard your GST claim:
- Verify supplier GSTIN using GSTN portal
- Ensure timely filing of GSTR-1 and GSTR-3B by your vendor
- Cross-check invoice and e-way bill authenticity
- Don’t fall for too-good-to-be-true pricing
How to Report or Avoid Fake GST Registrations
If you suspect someone is using your PAN or Aadhaar to register fake GSTIN:
- Visit the GST portal grievance redressal
- File a complaint under “Fake Registration”
- Submit Aadhaar, PAN, and relevant details
- CBIC may conduct verification and cancel the registration
Impact of Akola GST Fraud on Businesses
This case is a reminder that:
- GST department is actively cracking down using AI-based analytics
- Non-compliance by even one party in the chain can jeopardise your ITC
- Businesses must tighten vendor onboarding and internal checks
GST Compliance: How Efiletax Helps You Stay Safe
With Efiletax, you can:
- Automate GST return filing (GSTR-1, 3B, 9)
- Track vendor compliance and ITC matching
- Get expert review to avoid fake invoice risks
- Respond to GST notices with CA support
👉 Don’t wait for a GST audit to expose gaps. Start your compliance journey with Efiletax.
FAQs
1. What is the punishment for GST fraud over ₹5 crore?
Under Section 132, it’s a non-bailable offence with jail up to 5 years.
2. Can I be punished for claiming ITC from a fake vendor?
Yes. Even if unintentional, your ITC can be reversed and penalties imposed.
3. How do I check if my supplier is genuine?
Use the GST portal to verify their GSTIN, filing status, and contact details.
Summary
Akola trader arrested for ₹9.97 crore GST fraud using fake invoices and bogus firms. Know how GST scams work, legal risks under Section 132, and tips to stay compliant.