The Commercial Taxes Department of Karnataka arrested a key mastermind of a multi-State multi-crore GST fraud ring in a two-day operation. The ring issued fake invoices totalling to ₹1008 crore leading to illegally availing Input Tax Credit of ₹180 crore.
According to an official release, this operation spanning over two days, and conducted in collaboration with Kerala State GST authorities, revealed significant fraudulent activities. The accused Mohammed Siddiq was caught in Mysuru on Wednesday.
“The accused used to acquire dummy GST registrations using forged documents, facilitating scrap businesses in Kerala, Tamil Nadu, and Karnataka. He further issued fake tax invoices, misappropriating Input Tax Credit without remitting the taxes to the governments in the initial transaction. The fraudulent network extended its operations to Kerala and Tamil Nadu, obtaining fake GST registrations to unlawfully transfer bogus Input Tax Credit to fake taxpayers registered in Karnataka. According to the officials, this aimed to offset outward tax liability, evading GST cash responsibility on outward supplies and resulting in substantial losses to the government exchequer,” Commercial Tax Department said.
“The investigation exposed a systematic modus operandi orchestrated by the cartel, with accomplices in Mysuru, Mangaluru, and Kerala providing crucial support. Additionally, the complicity of certain auditors and GST practitioners in these fraudulent activities has been revealed,” the department said. The department claimed to have successfully dismantled a GST fraud racket involving approximately 100 bogus registrations across Karnataka, Kerala, and Tamil Nadu.