Chennai: The Directorate General of GST Intelligence on Wednesday busted a fake Input Tax Credit racket racket to the tune of Rs 98 crore. They were involved in issuing fake invoices worth over Rs 543 crore in the name of eight fake firms. The kingpin who was from Tamilnadu was also arrested and remanded to judicial custody.
According to official reports, the gang was involved in getting GST registration by creating fake firms and opening bank accounts for such companies. States such as Pune and Bengaluru also benefitted illegally from such fake tax invoice.
Additional Director General, DGGST, K Balaji Majumdar, in a press release said that the entire racket revolved around circular trading and passing on the Input Tax Credit to various customers without actual supply of goods.
“It was all about round-tripping the money through a labyrinth of monetary transactions involving banking and non-banking channels,” he added in the release.
Investigations revealed that while invoices were issued to allow recipients to avail fraudulent ITC, the actual tax liability on these bogus transactions were never discharged.
The kingpin and his accomplices, since July 2017, have been issuing invoices covering goods worth more than Rs 543 crore using the bogus firms. But the invoices were never accompanied by goods, thereby passing off Rs 98 crore approximately of fraudulent and ineligible ITC to various others, the release added.
Officials held many searches in Hosur on 24 January, which led to seizure of several documents and copies of fake invoices. Also three bank accounts have been frozen, and further investigation is on, said the release.