The Central Goods and Services Tax (CGST) authorities in Chennai have unearthed an inter-state fake GST invoice racket operating across Tamil Nadu and Karnataka. The preliminary probe has already confirmed tax evasion of Rs 50.85 crore, involving 12 entities concentrated in northern parts of Chennai. Officials believe the overall GST evasion could cross Rs 350 crore, based on the scale and modus operandi of the network.
According to officers, the CGST investigation team relied heavily on digital footprint analytics, including IP address-based correlation of GST returns, to identify the masterminds behind the operation.
CGST (North) Commissioner P. Manikkavel confirmed that the prime suspect-who was running an unregistered tax consultancy, M/s A.S. Associates, in Chennai has been arrested. The individual allegedly used fake Aadhaar cards to open bank accounts and execute rental agreements with unsuspecting owners of small buildings. The primary objective was to set up fictitious companies, secure GST registrations, operate briefly, and then disappear without a trace.
Officials revealed that the accused remotely operated 93 bank accounts opened in the names of bogus companies. They generated fake GST invoices for the transportation of goods, enabling clients to fraudulently claim Input Tax Credit (ITC) without any actual movement of goods. The undue ITC benefits were passed on to several entities located in Tamil Nadu and Karnataka, pointing to a wider network of collusion.
A special search operation conducted at the gang's premises in Chennai resulted in the seizure of dozens of mobile phones used exclusively for receiving OTPs for banking transactions. Investigators also recovered fake rubber stamps, cheque books, forged documents, and other incriminating materials.
A team led by CGST Additional Commissioner Loganatha Reddy is now tracking down other key members of the syndicate and verifying the role of certain manufacturing firms suspected of enabling the multi-crore GST fraud.
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