Chennai GST busts Rs 50 crore input tax credit fraud, two held

CHENNAI: The CGST Chennai North commissionerate on Monday said it busted a fake GST invoice racket operated to fraudulently pass on Input Tax Credit worth Rs 10.64 crore on bogus invoices valued at Rs 59 crore. Two key persons involved in the large-scale tax evasion racket of M/s MKN Enterprises were arrested, a release said. One of the arrested individuals is the proprietor of the firm engaged in availing and passing on fake ITC, while the other is his associate who was actively involved in the issuance of fake GST invoices. Based on analysis of data available on the GST portal, the anti-evasion wing of CGST Chennai North Commissionerate initiated a probe against the firm which revealed that the firm had fraudulently availed ITC of Rs 10.38 crore and passed on ITC of Rs 10.64 crore without any actual supply or receipt of goods. The fraudulent transactions were carried out through bogus invoices amounting to approximately Rs 59 crore, in clear violation of the provisions of the CGST Act, 2017. Primary findings indicate that a network of more than 90 business entities, spread across Chennai, is involved in this tax fraud, the release said. Probe is under way to identify the beneficiaries and trace the flow of funds. So far, Rs 42 lakh has been recovered, the release added. The accused were arrested under Section 69 of the CGST Act, 2017.