Fake bill racket worth Rs 1,464 crore busted, four arrested, know the whole matter

Bengaluru: The Enforcement Branch (South Zone) of the Commercial Tax Department of the Government of Karnataka has busted an interstate fake billing racket worth Rs 1,464 crore. This gang was evading taxes through fraudulent transactions of cement, iron-steel and other construction materials in Karnataka and Tamil Nadu. The investigation has so far revealed misuse of wrong input tax credit (ITC) worth approximately Rs 355 crore.

Busted through NGTP module

The scam was busted through modern GST analytics system and ‘Non-Genuine Taxpayers (NGTP)’ module developed by the department. IP address trails of the GST back office revealed suspicious billing patterns and circuitous ITC transactions. Based on these indications, the department conducted raid operations at several locations in Karnataka and Tamil Nadu.

fake gst registration

Investigation revealed that the gang had obtained multiple GST registrations on the basis of fake documents — such as stamp papers purchased online, fake rent bills, fake signatures of landlords and tenants, fake tax receipts and fake notary attestations. False claims of ITC were made by issuing fake bills through these fake companies and showing their mutual transactions. After availing huge tax benefits, the firms concerned canceled their GST registrations so as to avoid the audit trail of the department.

24 mobile phones, 51 SIM cards recovered

The enforcement branch conducted simultaneous raids in Bengaluru, Chennai, Vellore and Pernampattu and seized 24 mobile phones, 51 SIM cards, two pen drives, several bank statements and seals of dozens of companies. These are expected to provide important information related to the racket’s network and money flow.

Four accused arrested

During the operation, four key accused — two brothers Irbaz Ahmed and Nafeez Ahmed from Tamil Nadu (who had created fake companies like Trian Traders, Wonder Traders, Royal Traders, Galaxy Enterprises), and Eddala Pratap and Revathi from Bengaluru (who had created firms like Power Steel and Cement, P.R. Construction, S.V. Traders, S.R.S. Cement Steel Traders etc.) have been arrested. All four were produced before the Special Economic Offenses Court in Bengaluru, which has sent all of them to 14-day judicial custody.

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