Two traders held for Rs 15 cr ‘fake invoice’ scam

Mangaluru: The officers of anti-evasion wing of Mangalore Central GST commissionerate have unearthed a huge fraudulent input tax credit (ITC) scam based on ‘fake invoices’ submitted by two firms here amounting to Rs 15 crore. The proprietors of the two firms have been arrested.
The total amount of fraudulent ITC taken and utilised based on the fake invoices is approximately Rs 15 crore and the total value of goods involved in this case is approximately Rs 83 crore. Investigation is in progress to trace further leads to identify other firms involved in the racket.
The wing has booked a case for submitting fake invoices and evasion of GST against M/s Thouheed Scrap Dealer and M/s M K Traders. The said firms had taken fraudulent input tax credit (ITC) based on ‘fake invoices’ received from different firms and entities, without actual receipt of the goods.
According to Dharm Singh, commissioner, central GST, the fraudulent ITC taken was utilised by them for evasion of GST payable by them on their supplies of metal scrap procured from local unregistered dealers without payment of GST, to the manufacturers of aluminium, mild steel, copper rods, ingots, castings etc.
They were also involved in raising fake invoices to transfer ITC credit further in the invoice chain. The fraud involves those under cognizable and non-bailable offences as per provisions of Section 132 of the CGST Act, attracting inter alia, the provisions for arrest under Section 69 of CGST Act.
P K Abdul Raheem, proprietor, Thouheed Scrap Dealer and Abdul Khadar Kuloor Chayebba, proprietor, M K Traders were arrested on Sunday