Hyderabad Tax Officials Uncover Rs 32 Crore GST Fake Invoicing Racket
In a significant crackdown on tax evasion, officials from the commercial taxes department in Hyderabad have exposed a sophisticated fake invoicing racket amounting to approximately Rs 32 crore under the Goods and Services Tax (GST) regime. The discovery was made during a routine vehicle check last week, which led to the interception of a cargo van and subsequent investigation.
Routine Check Uncovers Suspicious Activity
Acting on instructions from senior officials, Deputy State Officer (Sales Tax) of the Mehdipatnam-1 circle in Hyderabad, Mohammed Majid Hussain, conducted a routine vehicle inspection. On February 4 at 8 pm, near Mehdipatnam, Hussain detained a DCM van for verification. Preliminary checks on the e-Way Bill portal revealed that the vehicle was ostensibly deployed by Hyderabad-based firm Suman Enterprises to deliver high-value consignments to multiple destinations across India in January.
However, suspicions arose when the driver disclosed that he was unaware of any commercial cargo. He stated that the vehicle, typically kept at the Nampally parking yard, is usually hired only for shifting household articles. This discrepancy prompted a deeper investigation into the firm's activities.
Analysis Reveals Massive Fraud Scheme
Subsequent analysis of transactions showed that Suman Enterprises had generated an abnormally large number of e-Way Bills and invoices using the same vehicle number. These documents indicated simultaneous trips transporting goods worth about Rs 175 crore to various unrelated recipients across the country.
Departmental analytics further indicated there was no corresponding movement of goods, suggesting that the documents were created solely to facilitate fraudulent Input Tax Credit (ITC) claims. The fraudulent ITC amounted to approximately Rs 32 crore, highlighting the scale of the racket.
Recipient Companies Implicated in Conspiracy
Recipient-wise analysis pointed to several companies that had claimed or attempted to claim ITC without actually receiving any supplies. These firms are now alleged beneficiaries of the conspiracy, as detailed in the complaint filed with police authorities. The scheme involved creating fake invoices to pass on fraudulent credits, undermining the integrity of the GST system.
Legal Action Initiated Against Accused
Based on a complaint lodged by Hussain, the Central Crime Station (CCS) sleuths of Hyderabad registered a case on February 7. The case has been filed under sections 316(2) (criminal conspiracy), 318(4) (cheating), 336(3) (forgery for purpose of cheating), and 340(2) (using as genuine a forged document or electronic record) read with 61(2) of the Bharatiya Nyaya Sanhita. The accused include M/s Suman Enterprises, its proprietor, and others involved in the racket.
CCS officials have confirmed that they are currently analyzing the evidence supplied by the complainant. Based on the preliminary probe findings, appropriate legal action will be initiated to hold the perpetrators accountable and recover the defrauded amount.
This incident underscores the vigilance of tax authorities in combating GST fraud and protecting public revenue. It serves as a warning to entities attempting to exploit the system through fake invoicing and fraudulent ITC claims.
