The arrests were made after carrying out detailed investigation and conducting about 50 searches to gather evidence, said a press release from the department. The two persons were arrested on Friday and produced before the Additional Chief Metropolitan Magistrate, Egmore, which remanded them in judicial custody until November 27.
The case against the arrested persons is that they, along with some others, have taken GST registration in the name of other persons after buying identity related documents from these persons either by making cash payment or supplying groceries to them. The purpose of floating such fictitious companies is to commit GST credit frauds. These fictitious companies issued tax invoices to various business entities without supplying any goods or services to facilitate, for a commission, fraudulent availment of GST credit by these business entities. GST on such bogus invoices was also paid using input tax credit based on fraudulent tax invoices received from some other fictitious companies opened by the associates of the arrested persons. In the process, GST credit fraud of Rs 35.72 crore on invoice value of Rs 401 crore was committed by the arrested persons along with their accomplices, the statement added.
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 accomplices.
Since July 2017, the officials have detected Rs 4,200 crore GST credit fraud in Tamil Nadu, while all Indian figure stood at around Rs 1 lakh crore, sources said.