A commodities trader and dealer from Sowcarpet in north Chennai was arrested on Monday for evading Rs. 61 crore in GST by opening multiple ‘fake’ registrations. Tax authorities said businessman Danaram used fake bills to show expenditure and availed input tax credit, which is illegal. “During a search, a racket of fraudulent companies involved in trading of fake tax invoices for availing input tax credit by dealers of various commodities was unearthed,” said GST principal commissioner (Chennai North) M Sreedhar Reddy.
The fake bills and invoices were being used to trade in gold jewellery, steel, plastics, fabric and timber among other things, said tax authorities who searched multiple locations in and around Sowcarpet where the fake entities of the businessman were located. The searches began on November 15. “Danaram, the mastermind behind the racket, has been arrested with others under provisions of the GST law,” said Reddy. Danaram is learned to have operated businesses with total revenue of Rs. 352 crore.
“The accused admitted that the said firms did not exist physically. Further investigation is in progress,” the tax commissioner added. Other traders in Sowcarpet under lens Danaram and a man named Kailash, who were part of a group of traders and businessmen in Sowcarpet evading GST, obtained 50 GST registrations together. Kailash is yet to be arrested. “We are now watching other traders in the area,” said the official.