During a series of search operations tracing fake firms in Delhi, DGGI officials found a company that was maintaining financial data on the cloud. After the further probe, the proprietor of one such firm was traced to Kolkata who was remotely maintaining data on the server in Delhi.
The investigation revealed that on questioning the proprietor admitted that these firms had not supplied any goods and have issued invoices involving the taxable value of approx. Rs 4,521 crore, which has Input Tax Credit (ITC) implication of approx. Rs 741 crore.
"Scrutiny of Tally data has shown that there are 636 firms being operated by this syndicate," a statement from the Finance Ministry said.