CGST Cracks Rs 350 Crore Fake Invoice Scam in North Chennai

An interstate group that was creating fake GST bills to cheat the government was caught in the city on Saturday. Early investigation shows they avoided paying about Rs 50.85 crore in taxes using 12 fake or suspicious companies in North Chennai.

Officers from the Central GST department tracked them down using digital clues, such as checking the IP addresses used to file GST returns. This helped them figure out where the fraud was happening and who was involved.

Based on how these people were operating and how big their network is, officers believe the total GST scam could be more than Rs 350 crore.

GST Commissioner (North) P. Manikkavel said the main suspect has been arrested. He was running an unregistered tax consultancy firm called A.S. Associates in Chennai.

To carry out the scam, he used fake Aadhaar cards to open bank accounts and to sign rental agreements for small buildings.

The idea was to create fake companies, get GST registration for them, use them for fraud, and then disappear within a few months without leaving any trace of who they really were.

He said, “They remotely operated 93 bank accounts opened in the name of companies that never existed. Fake GST invoices were raised for transporting goods. The benefit of Input Tax Credit fraudulently availed on bogus invoices without any movement of goods was passed on to certain companies located in Tamil Nadu and Karnataka.”

The officers searched the gang’s place in Chennai and found dozens of mobile phones that were being used to receive OTPs for bank transactions. They also recovered fake company rubber stamps, cheque books, and other documents used for the scam.

A special team, led by CGST Additional Commissioner Loganatha Reddy, is continuing the investigation to find the remaining gang members and to identify certain factories in two states that helped carry out this multi-crore GST fraud.