3 min readSuratApr 12, 2026 10:27 PM IST
The Directorate General of GST intelligence (DGGI), Surat, on Sunday arrested a Rajkot resident for her alleged involvement in a fake Input Tax Credit racket worth around Rs 1,550 crore spanning across seven states, taking the number of arrests in the case from Gujarat to two.
The accused, identified as Priyanka Lalit Sadaria (36), a resident of Rajkot, was arrested for the offences punishable under Section 132(1)(i) of the Central Goods and Services Tax Act, 2017 (tax evasion).
She was produced before the Surat district court, which sent her to judicial custody till April 24.
On January 15, the DGGI had arrested Bipin Bhanderi, a chartered accountant from Jamnagar, a key conspirator in the racket, officials said.
Acting on a tip-off, the DGGI Surat unit had busted the racket involving fraudulent availment of Input Tax Credit (ITC) amounting to approximately Rs 1,550 crore. The case pertains to multiple GSTINs (GST identification numbers) registered in Arunachal Pradesh which were found to be engaged in illicit activities, including suo motu generation of ITC and availment of ITC in the name of non-existent entities. (Input Tax Credit allows businesses registered under GST to claim credit for taxes paid on purchases, reducing their overall GST liability and preventing double taxation.)
Officials carried out a detailed analysis of GSTINs and their PAN-based linkages and detected a well-organised syndicate operating across several states, including Arunachal Pradesh, Maharashtra, Delhi, Uttar Pradesh, Madhya Pradesh, Haryana, and Gujarat.
Officials said that the network operated through a web of fictitious firms created solely to generate and pass on fake ITC without any underlying supply of goods or services.
DGGI sources said that investigation has uncovered multiple interconnected chains wherein ITC was fraudulently layered and routed through various entities to disguise its origin. In one such chain, ITC amounting to Rs 126 crore was passed through 3-4 successive layers, indicating a centralised control and a deliberate design to facilitate large-scale tax evasion.
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Acting swiftly, officials of the DGGI Surat Unit conducted an extensive search operation across multiple premises, resulting in the seizure of incriminating documents and digital evidence. Statements of key conspirators were recorded, in which they admitted to their roles in managing GST registrations, filing returns, and handling compliance for numerous non-genuine firms, officials said.
Based on the evidence, a key mastermind, Bipin Bhanderi, was arrested on January 15 under the CGST Act, 2017, officials said.
According to officials, Priyanka Sadaria had played a crucial role in orchestrating the fake ITC network.
The modus operandi of the syndicate is the creation of fictitious entities, generation of fake ITC, and its systematic layering and distribution across multiple firms to give a façade of genuine business transactions. Several other such chains are currently under active investigation, officials said.
