Two TN men arrested for Rs.35 crore GST credit fraud

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This is the second major GST fraud reported from Tamil Nadu in the last two months. The department had arrested a 56-year-old person from Kodungaiyur, for committing a GST credit fraud of ₹107 crore in September this year.

Two persons were arrested on the charge of committing Goods and Services Tax (GST) credit fraud of Rs 35.72 crore, Principal Commissioner for GST and Central Excise (Chennai Outer) said on Monday, November 16.

The arrests of the two from Pernambut, aged around 32, were made after carrying out detailed investigation and conducting about 50 searches to gather evidence. Additional Chief Metropolitan Magistrate, Egmore, Chennai, before whom the two were produced, has remanded them to judicial custody until November 27.

The two along with others had taken GST registrations in the names of other persons after buying identity-related documents from these persons either by making cash payments or supplying groceries to them. The purpose of floating such fictitious companies was to commit GST credit frauds, a release issued by the GST commissioner said.

These fictitious companies issued tax invoices to various business entities without supplying any goods or services to facilitate, for a commission, fraudulent GST credit to these business entities.

GST on such bogus invoices was also paid using input tax credit based on fraudulent tax invoices received from some other fictitious companies opened by the accomplices of the arrested persons.

The department also identified the business entities who had availed fraudulent GST credit passed on by the companies floated by the arrested persons and those companies which passed on fraudulent credit to the companies floated by the arrested persons and their accomplices.

The investigation now is focusing on whether any tax practitioner had guided the arrested persons in committing these frauds.

This is the second major GST fraud reported from Tamil Nadu in the last two months. The department had arrested a 56-year-old person from Kodungaiyur, for committing a GST credit fraud of ₹107 crore in September this year.

The case is that the accused along with a few others had taken GST registration in the name of persons with non-existent addresses using doctored documents and committed the fraud (with inputs from agencies)

Image Credit: News Bharathi

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