DGGI Nabs Mastermind Behind ₹1,825 Crore GST Refund Scam at Delhi Airport

In a major crackdown on GST fraud, officials of the Directorate General of GST Intelligence (DGGI), Ahmedabad Zonal Unit, have apprehended the alleged mastermind behind a massive ₹1,825 crore GST refund scam at Indira Gandhi International (IGI) Airport, Delhi. The accused, Kapil Chugh, was intercepted on 19 April 2026 upon his arrival from Dubai.

Chugh had been evading investigation for a prolonged period and failed to comply with as many as 22 summons issued by the authorities. After allegedly orchestrating the fraud across multiple jurisdictions, he fled to Dubai to avoid legal action.

Investigations reveal that Chugh, along with his associate Vipin Sharma, operated an extensive network of shell entities to fraudulently claim Input Tax Credit (ITC) and secure refunds under the guise of zero-rated exports. These firms were registered using borrowed or fake KYC documents and had no real business operations, infrastructure, or workforce. Individuals listed as proprietors or directors were merely name-lenders, compensated with fixed payments, while all key operations were centrally controlled by the accused.

The fraud involved generating fake purchase invoices without actual movement of goods, particularly using high-value tobacco products to inflate ITC claims. These invoices were routed through multiple intermediary firms to create a complex chain of fictitious transactions, thereby legitimizing ineligible tax credits.

In parallel, low-grade or locally sourced tobacco products were falsely declared as premium export goods such as Kimam or Jarda, with values significantly exaggerated. Despite the absence of any manufacturing setup, these goods were shown as exported, mainly through Kandla Special Economic Zone (KASEZ), enabling large-scale refund claims under LUT without payment of tax.

Authorities also found that many of these exports were either non-existent or highly overstated. Supporting documents like e-way bills and transport records were manipulated, often using duplicate vehicle numbers to sustain the illusion of genuine trade.

Financial investigations indicated unusual patterns, including circular transactions and minimal real fund movement. Payments were often routed through related entities or withdrawn in cash, with no evidence of genuine commercial expenses. Several firms were found to share common digital and operational footprints, confirming centralized control.

Apart from GST fraud, Chugh is also accused of misrepresenting business turnover to siphon off nearly ₹11 crore from a private bank. He has been chargesheeted by the CBI in a separate financial fraud case. Additionally, regulatory action has been initiated against his associate Vipin Sharma by SEBI for artificially inflating company valuations through bogus transactions linked to the scam.

The arrest marks a significant step in ongoing efforts to curb large-scale tax evasion and dismantle organized financial fraud networks.