In a major crackdown on tax evasion, officers of the CGST Chennai North Commissionerate have unearthed a fake GST invoice racket involving fraudulent Input Tax Credit (ITC) worth Rs 10.64 crore on bogus invoices valued at around Rs 59 crore. The racket was being operated by M/s MKN Enterprises, officials confirmed.
Two key individuals - the proprietor of M/s MKN Enterprises and his associate - have been arrested for their alleged roles in availing and passing on fake ITC without any actual supply or movement of goods.
Large-Scale Fake ITC Network Uncovered
The investigation, initiated by the Anti-Evasion Wing of the Commissionerate, was based on a detailed analysis of data available on the GST portal. The probe revealed that M/s MKN Enterprises had fraudulently availed ITC of Rs 10.38 crore and passed on ITC worth Rs 10.64 crore using fake invoices.
The transactions were carried out without any real goods or services being supplied, in blatant violation of the Central Goods and Services Tax (CGST) Act, 2017. Officials further discovered that the racket involved a network of over 90 business entities operating across Chennai, all suspected of being linked to this fraudulent chain.
Recovery and Legal Action
So far, the department has recovered Rs 42 lakh in connection with the case. Based on the evidence gathered and confessional statements of the accused, both individuals were arrested under Section 132 of the CGST Act, 2017, for committing offences punishable with imprisonment.
The accused were produced before the Additional Chief Metropolitan Magistrate (Economic Offences-II), Egmore, Chennai, who remanded them to judicial custody for 14 days, according to an official press release.
Crackdown on Fake GST Networks
The bust is part of the CGST department's continued nationwide drive against fake GST registrations and bogus invoicing networks, aimed at safeguarding government revenue and maintaining the integrity of the GST system.
Officials stated that further investigation is underway to identify the ultimate beneficiaries, trace fund flows, and dismantle the larger nexus of shell firms involved in this elaborate tax fraud.
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