Karnataka Tax Authorities Exposes ₹64 Crore ITC Scam Tied to Scrap Dealers

Tax Authorities Exposes ₹64 Crore ITC Scam - Authorities Exposes ₹64 Crore ITC Scam - ITC Scam Tied to Scrap Dealers - Scam Tied to Scrap Dealers - TAXSCAN

The Karnataka Commercial Taxes Department has successfully exposed a significant tax evasion scheme related to Input Tax Credit (ITC), involving the issuance of counterfeit invoices.

The alleged fraud centres around scrap dealers who are accused of manipulating the tax system for their benefit. In response to this, the Commercial Taxes Department in the Bengaluru South Zone carried out raids on 86 vendors, dismantling an organised network that was exploiting fake invoices to make false ITC claims., reported Indian Express.

The Commissioner of the Commercial Taxes Department disclosed that the raids were the culmination of an extensive two-month-long investigation specifically targeting vendors in the iron and scrap trade. The implicated vendors were found to have created bogus invoices for business transactions exceeding Rs 352 crore.

Through this deceptive practice, they manipulated ITC claims amounting to Rs 64 crore, deceiving the government in the process. The perpetrators utilised a distinctive method, employing GST numbers with suspended or cancelled registrations to generate fraudulent invoices. These invoices were then used to assert ITC refunds, constituting a fraudulent act against the government.

Furthermore, the accused vendors are alleged to have engaged in document forgery to register GST numbers for fictitious businesses. These falsified registrations were then utilised to generate fake invoices, as outlined in an official statement by the department. This discovery highlights a consistent pattern of deceitful practices aimed at exploiting the taxation system.

In the past 3 years, the Directorate General of GST Intelligence (DGGI) has cracked down 6000 above ITC cases. The department has made 500 arrests and has saved Rs. 57,000 crores for the government.

Read More: DGGI’s 3-Year Crackdown: 6,000+ Fake ITC Cases Uncovered, 500 Arrests, ₹57,000 Crore Saved

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