The GST and Central Excise Department, Chennai North has detected yet another case of GST fraud. The fraud relates to fraudulent taking and passing on of input credit of GST on the basis of bogus invoices without  supplying or receiving taxable goods or services and without paying GST.

The case booked is against a well established business entity from Chennai city that sells readymade garments through its various retail outlets. The managing director of the business entity and two other key individuals involved in the fraud who were on the run for more than a month had been nabbed by the department after sustained efforts.

The Enforcement and Compliance Management Unit of the department arrested all the three persons, who are in their 40s, for committing a GST credit fraud of about Rs.10 crore on invoice value of more than Rs.150 crore. The arrests were made after carrying out a detailed investigation, taking statements and conducting searches to gather evidence. The arrested persons  were produced before the Additional Chief Metropolitan Magistrate, Egmore, who remanded them to judicial custody until December 22.

The arrested managing director of the company is the main beneficiary and the mastermind of the fraud. He in collusion with the other two arrested persons received bogus invoices issued by fictitious firms established for the sole purpose of issuing such bogus invoices without supplying any goods or services.  The company made payments for these fake supplies through proper banking channels, but got back the money in cash from the fictitious companies after these companies had deducted their commission for issuing bogus invoices. In order to plough the cash back into the company’s account, the arrested persons created four fictitious companies and issued bogus invoices to these companies without making any supplies.

This is stated in a press release issued by Shri.Ravidranath, Principal Commissioner, Chennai.

 

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