A man, Kapil Chugh, accused of orchestrating a GST refund fraud worth approximately Rs 1,825 crore, was apprehended at Indira Gandhi International Airport in New Delhi upon his return from Dubai. Chugh, along with his associate Vipin Sharma, allegedly operated a scheme to fraudulently avail input tax credit and encash it through refund claims linked to zero-rated supplies.
Chugh reportedly controlled the network through dummy firms, employees, and associates, using borrowed KYC documents to create non-functional entities. Investigations revealed that fraudulent ITC was generated through fake purchase invoices without actual receipt of goods, involving high-value tobacco products shown in invoices to create substantial ITC.
Authorities found that the inflated turnover declared in GST returns was primarily due to fake billing, facilitating fraudulent ITC accumulation and refund claims without tax payment. The probe also uncovered fictitious or exaggerated exports, with financial trail analysis indicating negligible fund movements despite large transactions. Chugh is also implicated in another case involving fraudulent credit facilities and misrepresentation of export turnover.
