A massive GST fraud amounting to ₹593 crore has been unearthed in Karnataka, with authorities arresting the alleged mastermind behind the elaborate scheme involving fake invoices and shell entities.
Key Points
- The DGGI busted a ₹593 crore GST fraud involving fake input tax credit in Karnataka.
- A network issuing fake invoices without actual supply of goods or services was exposed.
- Mohammad Saifullah, a GST practitioner, was identified as the mastermind and arrested.
- The accused used shell entities and online accounting software to facilitate fraudulent ITC claims.
- An investigation is underway to identify additional beneficiaries and the full extent of the GST fraud.
In a major crackdown on GST fraud, the Belagavi zonal unit of the Directorate General of GST Intelligence (DGGI) has unearthed a fake input tax credit racket worth approximately Rs 593 crore, officials said.
The action followed an investigation into a suspicious GST registration, which led to multiple searches on premises linked to Star Tax Consultant in Bengaluru, the DGGI said in a statement.
"The searches exposed a well-organised network engaged in issuing fake invoices without any actual supply of goods or services, enabling wrongful availment and passing on of input tax credit (ITC) amounting to nearly Rs 235 crore," the statement said.
Preliminary investigation revealed that numerous GST registrations were being operated by the accused solely for generating bogus invoices and e-way bills to facilitate fraudulent ITC claims by the ultimate beneficiaries.
The accused systematically used online accounting software to record and monitor transactions routed through several shell entities with no genuine business activity.
Mastermind Arrested in GST Fraud Case
The statement said that Mohammad Saifullah, a registered GST practitioner identified as the mastermind of the operation, was found to be actively managing multiple non-existent and shell GSTINs and orchestrating the issuance of fake invoices and e-way bills in exchange for commission calculated as a percentage of invoice value.
"On being confronted with incriminating evidence, he admitted to his role in the fraudulent scheme. Saifullah was arrested on February 24 in Bengaluru under Section 69 of the CGST Act, 2017," the statement said.
Saifullah was produced before a special court for economic offences in Bengaluru, which granted transit remand for his transfer to Belagavi.
He was subsequently presented before the Judicial Magistrate First Class-4 court in Belagavi, which remanded him to judicial custody.
A probe is underway to identify the additional beneficiaries and quantify the full extent of the fraud, the DGGI said.
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