Kapil Chugh, the alleged mastermind behind a massive Rs 1,825 crore GST refund fraud, has been apprehended by Indian authorities after evading investigation and fleeing to Dubai.
Key Points
- Kapil Chugh, the alleged mastermind of a Rs 1,825 crore GST refund fraud, has been arrested by DGGI officers.
- Chugh evaded investigation and fled to Dubai after committing the GST refund fraud.
- The investigation revealed that Chugh and his associate Vipin Sharma fraudulently availed Input Tax Credit (ITC) through zero-rated supplies.
- Chugh misrepresented his export business turnover to siphon off approximately Rs 11 crore from Yes Bank.
- SEBI has taken action against Vipin Sharma for inflating company valuation through fake turnover linked to the GST fraud.
DGGI officers have arrested Kapil Chugh, who is accused of committing Rs 1,825 crore GST refund fraud, the finance ministry said on Monday.
The Ahmedabad zonal unit of the Directorate of GST Intelligence (DGGI) arrested Chugh, who is allegedly the mastermind of the GST refund fraud and wanted in many other economic criminal cases, on 19th April 2026 from IGI Airport upon returning from Dubai, the ministry said in a statement.
Details Of The GST Refund Fraud
"Chugh had evaded investigation and did not respond to multiple summons (22 in all) issued by DGGI, AZU, Ahmedabad and never joined investigations. He had fled to Dubai after committing GST refund fraud amounting to approximately Rs 1,825 crore across multiple jurisdictions," the ministry said.
The investigation in the case has revealed that Chugh, along with his associate Vipin Sharma, operated an arrangement for the fraudulent availment of Input Tax Credit (ITC) and subsequent encashment through refund claims on account of zero-rated supplies.
"Kapil Chugh emerges as the key mastermind and habitual economic offender who controlled the entire network through dummy firms, employees and close associates," the ministry said.
Modus Operandi Of The Fraud
The entities were created using borrowed KYC documents and were found to be non-functional or lacking infrastructure, manpower and genuine business activity at the declared premises.
The dummy proprietors/directors were merely name lenders and were compensated with fixed monthly cash payments. All operational activities, including GST registration, invoice generation, banking operations, filing of returns and submission of refund claims were handled centrally by the masterminds, the ministry added.
The ministry said that the masterminds generated fraudulent ITC by arranging fake purchase invoices without actual receipt of goods. High-value tobacco products were shown in invoices to create substantial ITC.
These invoices were circulated through multiple intermediary firms, forming a layered chain of transactions. The ITC so generated was passed from one entity to another through paper transactions, thereby creating an artificial trail of trading activity.
Further Investigations And Related Actions
"This layering enabled the masterminds to introduce ineligible ITC into the GST chain and subsequently accumulate the same in selected entities which were projected as exporters, particularly from Kandla Special Economic Zone (KASEZ)," the ministry added.
Separately, Chugh also misrepresented and inflated the turnover of his export business to siphon off approximately Rs 11 crore from Yes Bank. He has also been charge-sheeted by CBI in another case involving fraudulent availing of credit facilities through forged documents, the ministry said.
Further, SEBI, in its March 30 order, has taken action against Vipin Sharma, MD of M/s Elitecon, for inflating the company valuation through fake turnover generated by bogus billing linked to GST fraud, it added.
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