In a major crackdown on Goods and Services Tax (GST) fraud, the commercial taxes department in Bengaluru has uncovered a massive fake input tax credit (ITC) racket. The operation revealed suspicious transactions worth nearly Rs 72,384 crore and fraudulent claims amounting to Rs 1,420 crore. Two key accused were arrested in Bengaluru, bringing the total number of arrests made by the department in fake ITC cases this year to seven.
Details of the Fraud
According to officials, the accused generated fake tax invoices without the actual supply of goods and illegally availed input tax credit, causing significant losses to the state exchequer. The arrested individuals have been identified as Salimulla Baig, 59, proprietor of SKS Traders based in Nayandahalli, and Haseen Baig, 35, proprietor of KH E-Waste Recycler.
Salimulla Baig's Involvement
Salimulla Baig is alleged to have availed fake ITC worth around Rs 7,382 crore through suspicious transactions valued at nearly Rs 12,172 crore. These transactions were routed via 72 fake supplier firms, which were part of a well-organised network.
Haseen Baig's Involvement
Haseen Baig is accused of fraudulently claiming approximately Rs 738 crore in fake ITC through transactions worth Rs 7,212 crore. This involved 55 fake supplier entities operating under the guise of legitimate businesses.
Joint Operation and Modus Operandi
The arrests were made during a joint operation conducted by the enforcement wing (south zone) and the intelligence division of the commercial taxes department. Officials uncovered a well-organised fake billing network operating under the guise of tungsten carbide scrap, e-waste, and other scrap transactions. The network generated fake invoices without any actual movement of goods, enabling the accused to claim illegal ITC.
The department has been intensifying its efforts to curb GST fraud, and this operation marks a significant step in detecting and dismantling such rackets. Further investigations are underway to identify other individuals and entities involved in the network.
