BELAGAVI: In a major GST fraud crackdown in Karnataka, officers of the Directorate General of GST Intelligence (DGGI), Belagavi Zonal Unit, have unearthed a massive fake Input Tax Credit (ITC) racket involving fraudulent invoices worth a staggering Rs 593 crore, exposing a sophisticated network of shell firms operating across states.
According to an official press release issued by the DGGI, the investigation began with scrutiny of a suspicious GST registration, which eventually led investigators to a Bengaluru-based firm M/s Star Tax Consultant, suspected of orchestrating large-scale tax fraud.
Multiple search operations carried out at premises linked to the firm revealed a well-organised syndicate engaged in issuing fake invoices without any actual supply of goods or services. The racket enabled illegal availment and transfer of fraudulent Input Tax Credit amounting to nearly Rs 235 crore.
Investigators found that several GST registrations were created and operated solely to generate bogus invoices and e-way bills, allowing beneficiary firms to claim wrongful tax credits and evade government revenue.
Officials said the accused used advanced online accounting software to systematically record and monitor fake transactions routed through a network of non-existent business entities and shell companies that carried out no genuine commercial activity.
The investigation identified Mohammad Saifullah, a registered GST practitioner, as the alleged mastermind behind the operation. He is accused of managing multiple fake GST Identification Numbers (GSTINs) and coordinating issuance of fraudulent invoices and e-way bills in return for commissions calculated on invoice value.
During questioning, Saifullah reportedly admitted to his involvement after being confronted with substantial documentary and digital evidence gathered by investigators.
Saifullah was arrested in Bengaluru under Section 69 of the CGST Act, 2017. He was first produced before the Special Court for Economic Offences, Bengaluru, which granted transit remand for his transfer to Belagavi.
He was later presented before the JMFC-IV Court in Belagavi, which remanded him to judicial custody.