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 at Cristal Complex, Hill Fort Street, Adarsh Nagar was later found to be non-existent during a departmental inspection (panchanama) conducted in May 2025.
Though Bala Corporation claimed to deal in toys and video-game consoles, e-way bill analytics revealed a startling mismatch. Between March and April 2025, the firm issued 1,268 outward consignments not for toys, but for construction materials like Portland cement, copper pipes, plywood and iron rods.
Worse, there were no matching inward supply bills, clearly indicating fictitious transactions. Investigations revealed the firm used bogus documents to fraudulently avail ITC worth Rs 6.25 crore under IGST and passed on Rs 3.12 crore each in SGST and CGST to as many as 32 other entities, with no supporting data reflected in the auto-drafted GSTR-2B statements.
Officials cancelled Bala Corporation's GST registration on May 9, 2025, retrospectively effective from February 25, 2025. However, by that time, the government had already incurred significant revenue losses.
Authorities have alerted jurisdictional tax officers overseeing the 32 linked entities to begin immediate recovery proceedings. Meanwhile, the Central Crime Station (CCS) police have registered a case against Bala Corporation and its proprietor, N Vinod Kumar. Investigations are ongoing, with evidence being analysed for further legal action.
This case highlights the increasing use of forged documents and identity fraud in GST evasion, prompting authorities to ramp up analytics-based inspections and crack down on bogus entities.
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