The GST and Central Excise Department, Chennai Outer, has arrested a tax consultant from Pernambut in Vellore district for committing GST fraud by issuing fake invoices to the extent of ₹274 crore and passing on illegal and unlawful Input Tax Credit to the extent of ₹22.12 crore.
The person was arrested on January 26 and produced before the Economical Offences Judge II, Egmore, Chennai, says a PIB release.
The case against the arrested person was that he along with some accomplices has taken GST registrations by misusing KYC documents of other persons. The arrested person was also acting as tax-consultant to prepare all the documentation, including invoices for these fictitious companies. The purpose of floating such fictitious companies is to commit GST credit frauds.
The fictitious companies issued tax invoices to various business entities without actual supply of goods or services to facilitate, for a commission, fraudulent availment of GST credit by 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 associates of the arrested person.
In the process, GST credit fraud of ₹22.12 crore on Invoice Value of ₹274 crore was committed by the arrested person along with his accomplices. The department also identified the business entities that had availed fraudulent GST credit passed on by the companies floated by the arrested person and his accomplices.
The investigation is also focused on if any other tax consultant is involved with the arrested person in committing such frauds. Further investigation is ongoing, the release said.