Bengaluru: Four men arrested over Rs 200 crore GST frauds in city

BENGALURU: Four men who committed tax fraud in separate cases amounting to over Rs 200 crore have been arrested over the past few weeks. They allegedly raised fake invoices for multinational companies, including Chinese ones, for bogus services worth Rs 1,000 crore in a few years.

This is one of the biggest goods and services tax (GST) frauds busted in the city in recent times by the Bengaluru zonal unit of the Directorate General of GST Intelligence. The sleuths raided many places, including Chinese firms based in Mumbai, and seized documents related to fake Input Tax Credit (ITC). The computation of total tax fraud is still under way.

Sources with the intelligence wing said Delhi-based Kamlesh Mishra raised fake invoices worth Rs 500 crore in the name of bogus firms.

Mishra floated 23 companies in the names of poor individuals across the country, including some in Bengaluru who had a PAN and Aadhaar card. He paid them handsomely to use their documents to start companies in their names and created fake invoices for GST worth Rs 80 crore,” said an officer.

Mishra showed that he sold products for high profits in his fictional firms and projected a huge turnover helping them obtaining bill discounts and big loans from banks. “We raided and identified individuals who Mishra made as directors in bogus companies and after ascertaining the GST fraud, we arrested him,” the Bengaluru officer added.

Bialadugu Krishnaiah, a Bengalurubased businessman, had colluded with some Chinese men and created a firm called Jump Monkey Promotions India Ltd. “Through the firm, Krishnaiah issued fake invoices for well-established Chinese firms across India falsely claiming he had sold goods or services and as a kickback, he received Rs 53 crore sent by China Construction Sausam India Pvt Ltd and Quingdao Constructions. He interacted with them frequently via WeChat messaging service and even made cryptocurrency purchases for large sums for Chinese persons,” the intelligence officer said.

Sleuths recently raided a few Chinese firms in Mumbai and seized crucial documents. After his arrest, Krishnaiah was moved to Bengaluru prison. A probe is under way into his money transactions with foreign nationals which are believed to have generated large sums of unaccounted cash for them.

Bengaluru-based firm Benstar Power Technologies India Pvt Ltd was busted for issuing fake invoices to favour various multinational firms in Karnataka. “The kingpin is Suresh Mehta, director of Benstar, and he was arrested in Bengaluru and Rs 12 crore was recovered from one multinational company,” the officer added.

A Bengaluru scrap dealer identified as Haneef Mohammed of Khwaja Enterprises was arrested by sleuths availing fake Input Tax Credit worth crores of rupees. A repeat tax offender Mohammed’s non-existing supplier links for tax evasion was established, sources added.