Quick Summary
The Commercial Tax Department has exposed a GST racket operated by a city-based proprietor who allegedly floated a fictitious toy-trading firm to illicitly claim and distribute input tax credit (ITC) worth over Rs 6.25 crore. According to a complaint filed by Assistant Commissioner (State Tax) G Narender Reddy, the suspect, N Vinod Kumar, registered M/s Bala Corporation under the GST in February 2025 by submitting a forged electricity bill as proof of address. The declared business premises a
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FAQ :
A proprietor in Hyderabad set up a fictitious toy-trading firm, Bala Corporation, to illegally claim and distribute over Rs 6.25 crore in Input Tax Credit (ITC) using forged documents and fake transactions.
The illicitly claimed Input Tax Credit (ITC) amounted to over Rs 6.25 crore. Additionally, Rs 3.12 crore each in SGST and CGST was passed on to other entities.
Departmental inspections found the declared business premises to be non-existent. E-way bill analytics revealed that the firm issued consignments for construction materials, not toys, and there were no matching inward supply bills, indicating fictitious transactions.
Bala Corporation's GST registration was cancelled retrospectively. A case has been registered by the police against the firm and its proprietor, and authorities are initiating recovery proceedings from linked entities.
This case highlights the increasing use of forged documents and identity fraud in GST evasion, prompting authorities to enhance analytics-based inspections and crack down on bogus entities.
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