GST and Central Excise Department, Chennai Outer has arrested two persons, one aged about 34 years from Tondiarpet, Chennai and another aged 46 years from Villivakkam, Chennai, for committing a massive GST fraud, by issuing fake invoices to the extent of Rs. 776 crore and passing on illegal and unlawful Input Tax Credit, to the extent of Rs. 118 Crore. The arrests were made after carrying out detailed investigations and conducting searches at several premises, to gather incriminating evidence.
The said persons were arrested on 04.12.2020 and produced before the Honorable Economical Offences Judge 1, Egmore, Chennai.
The arrested duo, along with some accomplices, have taken GST registration in the name of other persons using fabricated/forged KYC documents. One of the arrested persons was also acting as a consultant to prepare all the documentation, including invoices for the fictitious firms. Such fictitious companies were floated to commit GST credit frauds. These fictitious companies issued tax invoices to various business entities without supplying any goods or services, for a commission, and facilitated fraudulent availment of GST credit by these business entities. GST on such bogus invoices was also paid using illegal input tax credit, based on fraudulent tax invoices received from some other fictitious companies opened by the accomplices of the arrested persons.
In the process, GST credit fraud of Rs. 118 Crore on Invoice Value of Rs. 776 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 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.
Further investigation is ongoing.
The Press Release can be accessed at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1678339