Bengaluru: The Enforcement Wing (South Zone) of Karnataka Government’s Commercial Tax Department has uncovered a massive interstate fake invoice racket operating across Karnataka and Tamil Nadu.
The racket involved fraudulent transactions worth Rs 1,464 crore related to cement, iron, steel, and other construction materials. This led to wrongful availing and passing of approximately Rs 355 crore as input tax credit (ITC) without any actual movement of goods.
The department’s advanced system analytics and an in-house developed Non-Genuine Taxpayer (NGTP) module played a crucial role in detecting the scam. The module analysed GST back-office IP address trails and identified unusual invoice patterns and circular ITC flows. Based on these analytics, coordinated searches were conducted simultaneously in Bengaluru, Chennai, Vellore, and Pernampattu.
The investigation revealed that the racket members obtained multiple fraudulent GST registrations using forged documents. These included stamp papers acquired online, fabricated rental agreements, fake signatures, bogus tax payment receipts, and counterfeit notary verifications. These fake registrations helped create multiple layers of shell companies that issued and circulated fake invoices.
After extensively misusing ITC, these entities voluntarily cancelled their GST registrations to evade detection. The department considers this a new and dangerous trend where cancellation of registration is used as a tool to conceal tax fraud.
During the coordinated raids, authorities seized 24 mobile phones, 51 SIM cards, two pen drives, numerous bank statements, and various rubber stamps. These materials are expected to provide critical digital, financial, and documentary evidence about the racket’s structure, scale, and interstate network.
With the active cooperation of Tamil Nadu’s Commercial Tax Department, four key accused have been arrested. Among them are two brothers from Tamil Nadu, Irbaz Ahmed and Nafees Ahmed, and two individuals from Bengaluru, identified as Addla Pratap and Revathi.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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