Chennai: The GST and Central Excise Department has arrested two persons from Pernambut in Vellore district of Tamilnadu for committing a GST credit fraud to the tune of Rs 35.72 crore.
The arrests were made after carrying out detailed investigation and conducting about 50 searches to gather evidence.
The arrested persons, both aged about 32 years, were produced before the Additional Chief Metropolitan Magistrate, Egmore and remanded to judicial custody until the November 27, a press release issued by Mr G Ravindranath, Principal Commissioner, Office of the Commissioner of GST and Central Excise ChennaiĀ Outer, said on Monday.
The case against the arrested persons was that they along with some others have taken GST registration in the name of other persons after buying identity related documents from these persons either by making cash payment or supplying groceriesĀ to them.
The purpose of floating such fictitious companies was to commit GST credit frauds.
These fictitious companies issued tax invoices to various business entities without supplying any goods or services to facilitate, for a commission, fraudulent availment of GST credit by these business entities.
GST on such bogus invoices was also paid using input tax credit based on fraudulent tax invoices received from some other fictitious companies opened by the associates of the arrested persons.
In the process, GST credit fraud of Rs 35.72 crore on invoice value of Rs 401 crore was committed by the arrested persons along with their accomplices.
The department also identified the business entities who had availed fraudulent GST credit passed on by the companies floated by the arrested persons and those companies which passed on the fraudulent credit to the companies floated by the arrested persons and their accomplices.
The investigation is also focused on if any tax practitioner has guided the arrested persons in committing these frauds.