Rs 1,200 crore GST Fraud Busted in Bengaluru: Huge Modus Operandi Unearthed
Bengaluru: A major GST fraud amounting to around Rs 1,200 crore was busted in Bengaluru by the Goods and Services Tax authorities on Wednesday. It was stated that in a bid to avoid tax to the tune of Rs 200 crore, GST invoices worth around Rs 1,200 crore were created. The module trading in fake GST invoices for claiming input tax credit was busted after the authorities conducted searches at 25 different places on Monday based on specific intelligence.
Three persons, Mohammed Basha, Hafeezur and Suhail were arrested and later produced before the Economic Offences Court at Koramangala, Bengaluru. The trio were remanded in 14 days judicial custody. According to G Narayanaswamy, the Commissioner of Central Tax, Bengaluru, these persons and the fake companies were engaging in trading of fake tax invoices for availing input tax credit by various steel scrap dealers and manufacturers of iron and steel products.
Investigations found that Basha had obtained 14 GST registrations in the name of his relatives, while Suhail obtained 6 GST registrations and floated 20 fake companies. They would create fake companies with fake addresses and issue fake GST invoices and then generate e-way bills. Investigations also found that fake vehicle registrations were created and no goods were supplied.
GST Commissionerate officials suspect that the accused might have floated a total of 30-40 companies and used a loophole present in the modules used to file GST to execute the fraud.“The fake companies were floated with an intention to fraudulently pass on input tax credit by issuing fake invoices without any supply of goods causing loss to the exchequer,” he said. The fictitious companies were managed by one or two people and had addresses in Bengaluru, Chitradurga and Chikkaballapur. A total of 18 companies are suspected to have purchased these invoices.
The sleuths had detected the scam two months ago and had to work for two months to zero in on the suspects working from fake addresses. “This is just the tip of the iceberg. We expect more details to come out of the case as the investigation progresses,” said Narayanaswamy.
Source: Oneindia