Officials of the Directorate General of GST Intelligence, Zonal Unit, Coimbatore, conducted simultaneous search on March 8 at residence and business premises of a key person of a fake bill trading racket and arrested him.
According to a release, the person had set up multiple fictitious registrations in Salem, Karur, Coimbatore, and Pollachi to generate and pass on fraudulent input tax credit.
All the firms were shown as engaging in different businesses such as plywood business and ceramic products in Tamil Nadu. The firms had passed on Input Tax Credit without supply of goods with a taxable value of approximately ₹ 318 crore, thereby availing and passing on fraudulent ITC of around ₹ 40 crore to various entities.
This key person, in connivance with another key person and mastermind, had set up and controlled various GST registrations, one of which was created under his own PAN, while other companies were registered in the name of his relatives and friends. During the search operation, incriminating documents like cheque books and passbooks of the bank accounts set up in the name of these fake firms were recovered from his residential premises.
The offender admitted to having aided at issuing fake bill through multiple fictitious registrations by misusing the facility extended by the government under GST regime for ease of doing business.
The proxy firms floated by him had availed of or passed on input tax credit without actual supply or receipt of goods. Further investigation against the units which had availed the fraudulent credit passed on by this network was on, the release added.