Rs 543-cr GST invoice scam unearthed in Tamil Nadu

According to a statement from K Balaji Majumdar, the additional director of DGGI on Wednesday, officials from the agency had last week searched several offices and residential premises in Hosur in Krishnagiri district, and busted a module involved in issuing invoices without supplying goods. The GST Intelligence team managed to not only arrest the kingpin, but also seized several incriminating documents, including copies of fake invoices issued on the letterheads of serval firms, which existed merely on paper.

Some unscrupulous persons have created serval bogus companies and opened bank accounts in their names using Aadhar cards and PANs of employees and use these to obtain GST registration. Subsequently, a complex maze of transactions was created between such bogus firms but without actual supply of goods. 

Invoices, which are basic documents on which input tax credit (ITC) is availed, were issued to the recipients who fraudulently utilised it to claim ITC. 

The press release further noted that ever since July 2017, the racket raised invoices worth over Rs 543 crore in the name of 78 bogus firms and thus leading to the ineligible claims of Rs 98 crore as ITC. As part of the action, the agency also froze three bank accounts of fake firms and key persons involved in the fraud.

A month ago, the directorate had busted another racket that followed the same modus operandi. In that case, the suspects had raised fake invoice worth Rs 220 crore to claim Rs 40 crore as input tax credit.