₹440 crore GST fraud racket busted in Chennai, 1 held
Search On For Two More Accused
Sivakumar.B@timesgroup.com
Chennai:1.12.2019
The Directorate General of Central Excise Intelligence has busted a racket involving ₹440 crore GST fraud in Chennai. The racket involved issue of fake invoices, without the actual supply of goods. The fraudsters claimed input tax credit to the tune of ₹79 crore in the process.
The department has found the involvement of three people in the racket. While one of them has been arrested and remanded, others are absconding. “Preliminary investigation revealed existence of 54 bogus entities merely on papers. The modus operandi was to get PAN card and Aadhaar card from identity lenders and float several fictitious entities and register them under CGST Act using those documents,” said principal additional director general K Anpazhakan.
Searches conducted on several premises revealed that most of them were locked. There were no signs of any major business activity in those places. “In fact, one of the declared premises turned out to be a tea shop. The bogus entities were floated in several layers to create a complex network of transactions among themselves, including transfer of money into bank accounts to make them appear genuine so that the fake invoices reach the manufacturers,” said Anpazhakan.
The accused availed themselves of the fraudulent input tax credit without receipt of goods in question, which was metal scrap. “The contact details furnished for the purposes of registration with the GST department and opening of bank accounts were found to be relating to persons not connected with the above activities in any manner,” the ADG said.
The bank accounts were opened by the bogus entities using forged documents allegedly in connivance with the officials of private banks. “Investigation revealed that the conspiracy was hatched by three people, where one person had the role of creating fictitious entities which in turn issued fake invoices without actual supply of goods and another played the key role in identifying the recipients of fake invoices who actually availed the ineligible ITC,” said Anpazhakan.
Search On For Two More Accused
Sivakumar.B@timesgroup.com
Chennai:1.12.2019
The Directorate General of Central Excise Intelligence has busted a racket involving ₹440 crore GST fraud in Chennai. The racket involved issue of fake invoices, without the actual supply of goods. The fraudsters claimed input tax credit to the tune of ₹79 crore in the process.
The department has found the involvement of three people in the racket. While one of them has been arrested and remanded, others are absconding. “Preliminary investigation revealed existence of 54 bogus entities merely on papers. The modus operandi was to get PAN card and Aadhaar card from identity lenders and float several fictitious entities and register them under CGST Act using those documents,” said principal additional director general K Anpazhakan.
Searches conducted on several premises revealed that most of them were locked. There were no signs of any major business activity in those places. “In fact, one of the declared premises turned out to be a tea shop. The bogus entities were floated in several layers to create a complex network of transactions among themselves, including transfer of money into bank accounts to make them appear genuine so that the fake invoices reach the manufacturers,” said Anpazhakan.
The accused availed themselves of the fraudulent input tax credit without receipt of goods in question, which was metal scrap. “The contact details furnished for the purposes of registration with the GST department and opening of bank accounts were found to be relating to persons not connected with the above activities in any manner,” the ADG said.
The bank accounts were opened by the bogus entities using forged documents allegedly in connivance with the officials of private banks. “Investigation revealed that the conspiracy was hatched by three people, where one person had the role of creating fictitious entities which in turn issued fake invoices without actual supply of goods and another played the key role in identifying the recipients of fake invoices who actually availed the ineligible ITC,” said Anpazhakan.
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