Daijiworld Media Network - Bengaluru (SP)

Bengaluru, Nov 15: The Goods and Service Tax (GST) authorities succeeded in unearthing a module involved with creation of fake GST invoices and getting input tax credit of about Rs 200 crore from the government. Three persons were arrested on the charge of creating fake invoice bills in this connection.

Suhail, Basha and Hafizur from the city, who are the masterminds of this fraud, and who had registered fake companies under GST stand arrested. The tax authorities say that the trio has cheated the central government to the extent of Rs 200 crore by way of input tax credits.

The alleged fraudsters had projected themselves as being involved with iron and steel scrap business at 25 places in Karnataka including the city, Chitradurga and Doddaballapur. They had floated 20 companies which did not exist, by providing identity documents of different persons. Commissioner of central taxes city south division, G Narayanaswamy, said in a press conference on Wednesday November 14 that a detailed investigation into all the aspects is under way.

The officials raided over 25 places during which, some incriminating documents were seized, the commissioner said.

Basha had registered himself and 13 others under GST while Suhail had registered for GST in six names. The department was provided with bogus address of these entities. In the name of non-existent companies, they used to generate fake GST invoices by creating e-way bill bearing fake registration numbers of vehicles. They then handed over the fake invoices they created for scrap iron and steel producers, and helped them to get input tax credit on them. The authorized producers used to submit these fake invoice bills to the department, claiming that GST on the products had been paid at the time of purchase of raw materials. On the basis of the bills, they got GST input tax credits and thus escaped from the need to pay tax to the government. The amount so saved through this tax fraud was being shared by the concerned on percentage basis, the department said.