DGGI Nagpur busts fake GST invoice racket, arrests 4 persons

The Directorate General of GST Intelligence (DGGI) said it has busted fraudulent transactions of Rs 621.60 crore, including fake input tax credit (ITC) of Rs 31.08 crore on fake invoices and arrested proprietors from Yavatmal district of Maharashtra on Friday.

A release by DGGI Nagpur zonal unit said on the basis of specific information regarding the operation of a massive fake invoice racket, simultaneous searches were conducted by the DGGI officers at a number of places in Yavatmal district.

It further informed that during investigations and on interrogation of the authorized persons, it was revealed that four taxpayers based in Yavatmal district were involved in the issuance of fake invoices and availment of fraudulent ITC, without the supply of any goods or services.

These taxpayers had declared themselves as commission agents and the suspicion regarding their activities arose because these taxpayers were showing huge transactions on paper while working on commission basis even though they were located in a remote area of Maharashtra with no major industrial hubs in their vicinity and with very poor rail/road connectivity.

"The declared places of business of these taxpayers were all found to be residential premises with no business activities and deceptive documents were found to have been uploaded on GSTN as proofs of addresses."

"It was observed that these taxpayers had undertaken fake transactions valued at Rs 621.60 crore only on paper and had cumulatively availed and passed on fraudulent ITC of Rs 31.08 crore on fake invoices without receipt or supply of any goods or services," it said.

It further informed that all four proprietors have been arrested on Friday and their interrogation is expected to give further clues regarding the fake operations.