GST Practitioner Arrested In Bengaluru In Fake Invoice Fraud Case

The accused is the mastermind in the fraudulent scheme and reportedly admitted to his role by actively managing multiple non-existent and shell GSTINs and orchestrating the issuance of fake invoices and e-way bills in exchange for commission calculated as a percentage of invoice value.

The accused was arrested in Bengaluru under Section 69 of the CGST Act, 2017 and was produced before the Special Court for Economic Offences, Bengaluru which granted his transit remand for his transfer to Belagavi. In Belagavi, he was produced before the Judicial Magistrate First Class-IV Court and the Court remanded the accused to judicial custody.

An investigation into suspicious GST registration led to multiple search operations at the premises linked to Star Tax Consultant in Bengaluru and the searches by DGCI officials 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 amounting to nearly Rs 235 crore.

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

Further investigations by DGCI officials are underway to identify additional beneficiaries and to quantify the full extent of fraud.