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Rs 1,200 Crore Fake GST Invoice Scam Busted in Karnataka

The fraudulent companies were engaged in trading of fake tax invoices for availing input tax credit.

Stacy Pereira | CNN-News18

Updated:November 15, 2018, 6:39 PM IST
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Rs 1,200 Crore Fake GST Invoice Scam Busted in Karnataka
Representative image. (Photo: Reuters)

Bengaluru: A scam involving fake GST bills worth Rs 1,200 crore has come to light in Bengaluru.

The preventive wing of the south commissionerate of the GST busted the racket after two month long investigations. The fraudulent companies were engaged in trading of fake tax invoices for availing input tax credit.

The accused were engaged in trading of iron and steel scrap through various companies. The kingpins of the scam have been identified as Suhail, Basha and Hafeezur.

Suhail and Basha floated 20 fake companies and registered them under the GST by giving fake names and addresses. All companies, however, in reality operated out of a single office and the bill were generated from a single computer.

The modus operandi involved floating fake companies, issuing fake GST invoices and generating e-way bills with fake vehicle registration details without actually supplying goods. The companies were created with an intent to fraudulently pass on input tax credit through these fake invoices.

"A search was conducted on 12th of November. We recovered some incriminating documents from 25 locations and have nabbed three persons who we believe to be the key persons involved in generating these fake invoices," said G Narayanswamy, IRS Commissioner of Central Tax, Bengaluru South.

The accused have reportedly generated and issued tax invoices having turnover of about Rs 1,200 crore having a GST liability of Rs 200 crore. Their confessions have revealed that at least 18 iron and steel producers have availed these bills to claim input credit. Further investigations are underway.

Meanwhile the three accused have been arrested under the provisions of the GST law and have been remanded under 14-day judicial custody.

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| Edited by: Sana Fazili
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