Bengaluru, Nov 17: A two-month-long investigation into a web of fake companies has finally detected one of the biggest frauds in Bengaluru — the generation of fake bills worth Rs 1,200 crore — after the Goods and Services Tax (GST) regime was implemented last July in the country.
The GST authorities have arrested three persons -- Suhail, Hafeezur, and Basha – in Bengaluru for generating fake GST invoices amounting to Rs 1,200 crore. The tax evaded as a resulted of these fake invoices amounts to a whopping Rs 200 crore, the officials said.
All the three accused were produced in front of the Economic Offenses Magistrate, Koramangala and sent to 14-days judicial custody at Parappana Agrahara jail. All the three accused persons, which were the kingpins in the racket, have confessed to their fraud. The department is expecting more arrests in the case in the coming days.
Though the companies floated were in Karnataka’s capital, the input tax credit may have been used by iron and steel producers located outside the State too, said investigators, who used data analytics to zero in on them. GST officials also believe that such fraudulent transactions are being seen in plastic, aluminium, iron and steel trade.
"These persons and the fake companies were engaged in trading of fake tax invoices for availing input tax credit by various steel scrap dealers and manufacturers of iron and steel products," G Narayanaswamy, Commissioner of Central Tax, Bengaluru South said.
According to him, it's just a "tip of the iceberg", as detailed investigations into this have been initiated. “It took us two months of meticulous investigation to unearth the module and arrest the three kingpins,” he said.
Officials said that Basha had obtained 14 GST registrations in the name of his relatives, while another accused, Suhail had obtained 6 GST registrations and have floated a combined 20 fake companies between them.
"Their modus operandi involved creating fake companies at fake addresses, issuing fake GST invoices and generating e-way bills with fake vehicle registration details without the supply of any goods," Narayanaswamy said.
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