<p>Bengaluru: The Commercial Taxes Department on Wednesday said it had busted a Rs 2,384-crore Input Tax Credit (ITC) fraud cartel by arresting two suspects. </p>.<p>Based on specific intelligence inputs developed by the Intelligence Wing, the department said it unearthed a “highly organised” fake invoicing cartel operating through entities purportedly engaged in trading tungsten carbide scrap, e-waste and other scrap materials, "causing massive loss to the exchequer through fraudulent availment and passing of <br>inadmissible ITC.” </p>.<p>The arrested suspects have been identified as Saleemulla Baig, 49, and Hassain Baig, 35. </p>.<p>The probe found that Saleemulla, from SKS Traders, “fraudulently” availed fake ITC from 72 bogus supplier entities involving a suspicious turnover of nearly Rs 2,172 crore and fake ITC of around Rs 382 crore. </p>.<p>Similarly, Hassain, from KH E-Waste Recycler, Nayandahalli, allegedly availed fake ITC from 55 bogus supplier entities involving a suspicious turnover of approximately Rs 212 crore and fraudulent ITC of nearly Rs 38 crore. </p>.<p>“Both have been arrested under the provisions of the GST Act. The investigation has exposed a fake invoicing network involving 127 bogus entities, with aggregate suspicious turnover of about Rs 2,384 crore and fraudulent ITC of nearly Rs 420 crore,” the department said. </p>.<p>Investigations further revealed that one of the principal entities in the cartel showed an abnormal escalation in declared turnover from nearly Rs 50 crore to Rs 945 crore within the last three financial years, without corresponding business infrastructure or actual movement of goods, indicating large-scale fraudulent paper transactions and circulation of fake tax invoices. </p>.<p>The department also claimed that misuse of high-value tungsten carbide scrap transactions, along with e-waste and scrap trading activities, were among the major aspects unearthed during the investigation. The Tungsten Carbide scrap transactions alone allegedly involved a suspicious turnover of nearly Rs 217 crore and fraudulent ITC of around <br>Rs 39 crore. </p>.<p>The department also found that whenever departmental action, such as blocking of ITC or issuing notices, was initiated, the alleged fraudsters floated fresh bogus entities and availed new fake ITC to continue the fraud and evade detection. </p>
<p>Bengaluru: The Commercial Taxes Department on Wednesday said it had busted a Rs 2,384-crore Input Tax Credit (ITC) fraud cartel by arresting two suspects. </p>.<p>Based on specific intelligence inputs developed by the Intelligence Wing, the department said it unearthed a “highly organised” fake invoicing cartel operating through entities purportedly engaged in trading tungsten carbide scrap, e-waste and other scrap materials, "causing massive loss to the exchequer through fraudulent availment and passing of <br>inadmissible ITC.” </p>.<p>The arrested suspects have been identified as Saleemulla Baig, 49, and Hassain Baig, 35. </p>.<p>The probe found that Saleemulla, from SKS Traders, “fraudulently” availed fake ITC from 72 bogus supplier entities involving a suspicious turnover of nearly Rs 2,172 crore and fake ITC of around Rs 382 crore. </p>.<p>Similarly, Hassain, from KH E-Waste Recycler, Nayandahalli, allegedly availed fake ITC from 55 bogus supplier entities involving a suspicious turnover of approximately Rs 212 crore and fraudulent ITC of nearly Rs 38 crore. </p>.<p>“Both have been arrested under the provisions of the GST Act. The investigation has exposed a fake invoicing network involving 127 bogus entities, with aggregate suspicious turnover of about Rs 2,384 crore and fraudulent ITC of nearly Rs 420 crore,” the department said. </p>.<p>Investigations further revealed that one of the principal entities in the cartel showed an abnormal escalation in declared turnover from nearly Rs 50 crore to Rs 945 crore within the last three financial years, without corresponding business infrastructure or actual movement of goods, indicating large-scale fraudulent paper transactions and circulation of fake tax invoices. </p>.<p>The department also claimed that misuse of high-value tungsten carbide scrap transactions, along with e-waste and scrap trading activities, were among the major aspects unearthed during the investigation. The Tungsten Carbide scrap transactions alone allegedly involved a suspicious turnover of nearly Rs 217 crore and fraudulent ITC of around <br>Rs 39 crore. </p>.<p>The department also found that whenever departmental action, such as blocking of ITC or issuing notices, was initiated, the alleged fraudsters floated fresh bogus entities and availed new fake ITC to continue the fraud and evade detection. </p>
