Bengaluru: A special team of investigators from the Commercial Taxes Department of Karnataka arrested four people who were a part of the cartel involved in fake transactions of scrap goods. With the arrests, the department claimed that it dismantled the fake Input Tax Credit (ITC) racket involving nearly 100 firms with a turnover of Rs 1,008 crore and tax amounting to nearly Rs 180 crore.
The arrested were Mohammad Siddiq, the mastermind; Imtiaz, a close associate of Siddiq; Sameer Pasha, who was Siddiq’s partner; and Soni Vishwas, a close associate of the cartel members. The investigators said that Viswas was arrested after a month-long chase as he was on the run.
“He constantly changed locations by crisscrossing the states. He managed to secure multiple mobile SIM cards with the help of his acquaintances. Based on reliable information, he was tracked on a real-time basis by several teams of officers of Kalburgi, Hubli, Bellary and Malnad Divisions who were in disguise and ultimately nabbed him after a marathon chase of about 24 hours,” the department said in a statement.
The department said that the arrested were involved in the creation of multiple registrations in Kerala, Tamil Nadu and Karnataka based on fabricated documents. They allegedly supplied fake tax invoices at a multi-level supply chain without the actual supply of goods facilitating the availing of Input Tax Credit (ITC) by the beneficiaries without remitting any output tax at the beginning of the supply chain. “In most cases PAN and Aadhar cards of friends, other gullible and poor people were used to prepare rental agreements and obtain GST registrations. These registrations were operated by the cartel members for a time spanning six to twelve months by which time several crores of transactions were reflected and ultimately closed without paying any taxes,” the department said.
To syphon off the evaded sum, the department said, the cartel converted the money into cash “through Retail Payment and Settlement System of National Payments Corporation of India (NPCI)”.
“Business Correspondents associated with banks and Fintech Companies were the channels used for such conversions the value of which as of date has crossed Rs 140 crore,” it said, adding that investigations are continued.