Rs 1,420cr GST fraud racket busted; 2 arrested in Bengaluru

Bengaluru: Cracking down on GST fraud, the commercial taxes department unearthed a fake input tax credit (ITC) racket involving suspicious transactions worth nearly Rs. 72,384 crore and fraudulent claims amounting to Rs. 1,420 crore. Two key accused were arrested in Bengaluru, taking the total number of arrests made by the department in fake ITC cases this year to seven.

According to sleuths, the accused generated fake tax invoices without actual supply of goods and illegally availed input tax credit, causing huge losses to the state exchequer. The arrested are Nayandahalli-based Salimulla Baig, 59, proprietor of SKS Traders, and Haseen Baig, 35, proprietor of KH E-Waste Recycler.

Officials said Salimulla Baig allegedly availed fake ITC worth around Rs. 7,382 crore through suspicious transactions valued at nearly Rs. 12,172 crore routed via 72 fake supplier firms. Haseen Baig is accused of fraudulently claiming around Rs. 738 crore in fake ITC through transactions worth Rs. 7,212 crore involving 55 fake supplier entities.

The arrests were made during a joint operation conducted by the enforcement wing (south zone) and intelligence division of 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.