BENGALURU: Three persons allegedly involved in generating fake GST invoices and defrauding the government of around Rs 200 crore have been arrested, following an investigation that lasted around two months. The accused have been identified as Suhail, Mohammed Basha and Hafiz, who generated and issued tax invoices to the tune of Rs 1,200 crore resulting in the massive racket. The trio has been remanded to judicial custody for 14 days.
According to G Narayanaswamy, GST Commissioner, Central GST, Bengaluru South, the fraud was detected using various data analytics techniques employed by the GST Commissionerate. “Though three people have been arrested initially, we suspect that more people could be involved in the fraud. This module was detected in the scrap industry, involved in the trade of iron and steel and is one of the big rackets detected till date,” he said.
Modus operandi
The modus operandi of the accused involved having multiple GST registrations, by creating fake companies at fake addresses. The accused then started issuing fake GST invoices and generating e-way bills with fake vehicle registration details without actually supplying any goods.While Basha had obtained 14 GST registrations in the name of his relatives and friends, Suhail had six GST registrations which were used to generate fake invoices.
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,”he said.