Officers of the CGST Chennai North Commissionerate have busted a major fake GST (Goods and Services Tax) invoice racket, which was operated to fraudulently pass on Input Tax Credit (ITC) worth approximately ₹10.64 crore on bogus invoices valued at about ₹59 crore.
The Commissionerate has arrested two key suspects allegedly involved in this large-scale tax evasion racket of M/s MKN Enterprises. One of the arrested individuals is the proprietor of the firm, which is engaged in availing of and passing on fake ITC, while the other is his associate who was actively involved in the issuance of fake GST invoices, according to the officials.
Based on a detailed analysis of data available on the GST portal, the Anti-Evasion Wing of CGST initiated an investigation against the said firm. The investigation revealed that the firm had fraudulently availed ITC of ₹10.38 crore and passed on ITC of ₹10.64 crore without any actual supply or receipt of goods.
The fraudulent transactions were carried out through bogus invoices amounting to approximately ₹59 crore, in clear violation of the provisions of the CGST Act, 2017. Preliminary findings indicate that a network of more than 90 business entities, spread across Chennai, is involved in this tax fraud. Further investigation is under way to identify the beneficiaries and trace the flow of funds. So far, the recovery made in this case is ₹42 lakh.
Based on material evidence gathered and the admission of their involvement in the fraud, both accused were arrested under the provisions of the CGST Act, 2017, for committing offences punishable under Section 132 of the Act, the officials said. They were produced before the Additional Chief Metropolitan Magistrate, Economic Offences-II, Egmore, Chennai, who has remanded them to judicial custody for 14 days, according to a press release.
Source from: https://www.thehindu.com/news/cities/chennai/two-persons-arrested-for-gst-fraud-in-chennai/article70159747.ece
