Taxmen arrest three for issuing fake GST invoices to claim input tax credit

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The Commercial Taxes department has busted a racket involved in issuing fake GST invoices to help some dealers claim input tax credit (ITC) from the government. Three Bengaluru-based businessmen, who have been arrested, had issued fake GST invoices worth Rs 203 crore to facilitate bogus claims, according to Commercial Taxes Commissioner M.S.Srikar. A dealer can claim input tax credit only against taxes paid.

Their operation came to light during the course of investigations following first series of arrests. In the last one month, the department officials have raided more than 50 business premises in Bengaluru, the Commissioner said in a press release. The accused persons were identified as Vikram Jeet Duggal, proprietor of Rajiv Enterprises, Ashfaq Ahamed and Nayaz Ahmed. They had obtained 14 GST registrations in the name of their relatives and others and, issued fake GST invoices without selling any goods or services, the release said.

The trio ran an office at the second floor of one of their residences where invoices and e-way bills were being generated. On a visit, the taxmen’s team led by Additional Commissioner (Enforcement) Nitesh Patil found records, and usernames and passwords of 14 firms. The Commissioner warned dealers that bill-trading and claiming of input tax credits in cases of fictitious transactions was a serious fraud under GST laws. 

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