CTRL+ALT+DECEIT: Tax-Evasion Implications of alleged NexGen Rigs Kerala Gaming PC Sales Fraud misusing Malayalam Gaming and Tech Youtubers for Promotions

The Nexgen Systems Gaming PC sales scam has left hundreds of people at loss of money, after being offered with BUY One GET One Offers, with possible tax evasion implications
tax evasion - NexGen Rigs - Kerala Gaming PC Sales Fraud - misusing - Gaming - Tech Youtubers - Promotions - taxscan

An alleged Gaming PC sales fraud has allegedly left hundreds of gaming and technology enthusiasts at a loss of money and time. Nexgen Rigs, at Trivandrum, Kerala is said to have used Malayalam Technology and Gaming Youtubers for promotion and boosting sales.

It is a tempting offer when you get two for the price of one, right? But the ones who believed the “buy one, get one free” promise by the computer sales and service shop in Kerala, backed by misled youtubers and influencers have paid a big price, falling for the impossible offer.

As per sources, the modus operandi of the business was to lure customers into, by heavy promotion using famous names among Malayalam tech, lifestyle and gaming youtubers in Kerala.

Impressed by the offers promoted by the youtubers they trust, the customers in anticipation of a profitable deal fell prey to the mismanagement or perhaps scandalous mode of doing business by the proprietor.

Collecting advances ranging from Rs. 5000 to Rs. 2-2.5 Lakhs, the NexGen Systems, started taking orders for Gaming PCs, promising another PC for free when a gaming PC purchase is made. Even though seemingly unbelievable, the Computer Sales and Service Provider had already earned the trust factor, by leveraging the reach and credibility of famous Malayalam Tech and Gaming Youtubers such as Eagle Gaming, Gadgets One Malayalam, Viper ESports, Kaztro, Trinity Vlogs, Karthik Surya etc.

In the initial phase, 30-40% of the Customers who eagerly put their hard-earned money had received the promised order. However, the more the orders were placed, the fewer the number of Gaming PCs were delivered.

Being one of the major players in the business of assembled PC distribution, NexGen Systems, with a standing of almost 6 years in business, could keep the customers from initiating legal action in spite of delaying the delivery of the orders.

Currently, almost 300 customers are awaiting delivery of the ordered gaming PCs. Notably, the price of a gaming PC begins from about half a lakh rupees, for the lowest spec ones, extending all the way upto Rs. 2-3 Lakhs per completely assembled ones, even more in personalized and customized versions.

In total, the sum of money to be paid back is expected to be at around 2 Crore or above, with the proprietor of the business missing.

Now, the Malayalam Tech and Gaming Youtube community has opened up about how the scamsters convinced them of their credibility and are anticipating to initiate legal action against the proprietor and partners.

The proprietor, according to sources, has convened a meeting and the customers, whose PCs were undelivered after placing orders since January 2022. In the meeting, a representative of the proprietor came to attempt efforts of conciliation, stating that some vendors scammed Nexgen Rigs.

Further, the chances of securing unaccounted supplies of parts and computer hardwares, in this matter is alleged by the defrauded customers who got misled by the false advertisements and promotions through famous youtubers.

The situation has raised serious concerns about the amount of unaccounted money involved in the fraudulent scheme, warranting further investigation to ascertain the extent of the loss to the exchequer. Despite attempts to seek the proprietor’s perspective on the matter, there has been no response to queries or calls.

Further investigation in this manner revealed that no Goods and Services Tax Annual Returns – GSTR-9 were filed by the partnership firm after FY 2018-2019.

In addition, the GSTR-3B was filed for the month of May in FY 2023-2024, in the month of October, leading to further penalty and interest as per GST laws.

Possibilities of tax evasion in consumer-electronics scams like this and other scams are something that the revenue authorities should look into and perhaps, implement schemes along with recovery procedures to provide a fair compensation to the defrauded and honest customers, a much required relief to their hardships.

Further details are awaited as the consumers move on to legal steps to recover their hard-earned money lost in the scam.

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