In a significant effort towards curbing evasion under GST, Chennai North GST and Central Excise Commissionerate, Chennai had gathered credible intelligence and taken up search operations on 15.11.2018 at various locations in Chennai. During the search operations, the officers of Headquarters Preventive Unit have busted a big racket of fraudulent companies engaged in trading of fake tax invoices for availing input tax credit by dealers of various commodities through the country.
Based on specific intelligence and through data based analysis, the officer under the supervision of Shri M. Sreedhar Reddy, IRS, Principal Commissioner of GST and Central Excise, Chennai North raided various locations on 15.11.2018. The team found incriminating documents and electronic evidences pertaining to fake companied at 9 locations which were searched.
The investigation revealed that the fake companies registered with the department are issuing fake invoices without actually trading the goods to various other companies. One Danaram, the mastermind of activities, who with his other accomplices is running the racket.
Danaram had obtained 37Nos. of GST registrations and Kailash had obtained 13 Nos. of GST registrations and totally floated 50 fake companies together. The modus operandi involved in creating/floating fake companies at fake/wrong address, issuing fake GST invoices and generating e-way bills with fake/wrong vehicle registration details without supply of any goods. The fake companies are floated with an intention to fraudulently pass on input tax credit by issuing fake invoices without any supply of goods causing loss to the exchequer. Prima Facie it is evidenced that these person have generated and issued tax invoices having turnover of Rs.352 Cr. (approx) with a GST liability of nearly Rs. 61 Cr (approx). The individuals have admitted that the said firms do not exist physically and that the said firms were floated with the intention of earning money by issuing fake invoices. Based on records/documents and committal statement, Danaram was taken into custody of the officers and have been arrested under the provision of GST law. The officers Shri Rajeev Kumar, Additional Commissioner and Shri G A Harhanand, Assistant Commissioner (Preventive) along with the team of officers have played a key role in detecting the fraud. Further investigation is in progress.
During the course of investigation, it has been noticed that fake bills/invoices are being issued in commodities like Gold Jewellery, Steel, Plastics, Fabric, timber etc. Action will be intensified against such fraudsters in due course by the Department.