GST fraud worth ₹350 crore detected, one arrested


The GST and Central Excise Department, Chennai North, has arrested a 27-year-old man from Kodungaiyur for allegedly committing GST fraud by issuing fake invoices with taxable value of more than ₹350 crore and passing on illegal and fraudulent input tax credit to the extent of ₹64 crore.

According to a press release, the arrested individual was produced before the Additional Chief Metropolitan Magistrate, Egmore, who remanded him in judicial custody till February 8.

He, in collusion with seven others, had fraudulently obtained GST registration for about 90 business entities using the identity-related documents of other individuals. The purpose of floating the fictitious companies was to commit GST credit frauds.

The fictitious companies issued tax invoices to various other business establishments without supplying any goods or services, for a commission to facilitate fraudulent availment of GST credit by these establishments.

In the process, GST credit fraud of ₹64 crore on invoice value of ₹350 crore was committed by the arrested person along with his seven accomplices. The department is on the lookout for his accomplices who are on the run. The investigation was also focussed on certain tax professionals for their role in the fraud.

Since November 2020, six arrests related to GST credit fraud of Rs. 216 crore on invoice value of Rs. 1,655 crore were made.

All taxpayers were advised to check the legitimacy of input tax credit before taking such credit, and not fall prey to GST credit fraudsters.

The department said that certain individuals who were summoned during the course of investigation have disregarded the summons. The department has the powers to summon any person whose attendance is considered necessary either to give evidence or to produce a document or any other thing in any inquiry. A person who is summoned is legally bound to appear before the department on the given date and time and wilful disobedience was a punishable offence, the release said.

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