Bengaluru, 27 Feb

In a major crackdown on GST fraud, the Belagavi zonal unit of the Directorate General of GST Intelligence (DGGI) has unearthed a fake input tax credit racket worth approximately Rs 593 crore, officials said.

The action followed an investigation into a suspicious GST registration, which led to multiple searches on premises linked to Star Tax Consultant in Bengaluru, the DGGI said in a statement.

“The searches exposed a well-organised network engaged in issuing fake invoices without any actual supply of goods or services, enabling wrongful availment and passing on of input tax credit (ITC) amounting to nearly Rs 235 crore,” the statement said.

Preliminary investigation revealed that numerous GST registrations were being operated by the accused solely for generating bogus invoices and e-way bills to facilitate fraudulent ITC claims by the ultimate beneficiaries.

The accused systematically used online accounting software to record and monitor transactions routed through several shell entities with no genuine business activity.

Mohammad Saifullah, a registered GST practitioner and the mastermind, was allegedly managing multiple non-existent and shell GSTINs and arranging for fake invoices and e-way bills in exchange for commission.