Kerala and Karnataka tax officials have busted a nationwide cartel involved in fake Goods and Services Tax (GST) registrations.
In a June 22 operation, the intelligence unit of the Kerala State Goods and Services Tax (SGST) department in Kanhangad, in collaboration with other Kerala SGST intelligence units and tax intelligence units in Karnataka, uncovered the existence of 30 fake registrants spread across the country, operating under benami firms.
The illicit operation had an estimated total business turnover of ₹850 crore recorded between October 2022 and June 2023 across India, the Kerala SGST department said on Friday, terming its magnitude ‘‘staggering.’‘ Falsified invoices for areca nuts and fabricated e-way bills were systematically generated to conceal the illicit transportation of goods from Karnataka to the Gutkha manufacturing states in North India.
Kerala accounted for approximately ₹180 crore of the overall sum.
The cartel managed to avail themselves of Input Tax Credit (ITC) worth ₹9 crore without engaging in legitimate trade activities, the department said.
Any genuine supply of goods was practically nonexistent in these transactions.
The cartel capitalised on benami registrations, manipulating personal credentials such as Aadhaar and PAN numbers to acquire mobile connections, Aadhaar updates, establish bank accounts, and secure GST registrations.
Coordinated search
‘’During the coordinated searches conducted at 27 business establishments in Kerala and Karnataka, crucial statements and substantial incriminating evidence were obtained, further bolstering the ongoing investigation. The authorities are determined to pursue all leads and bring those responsible for perpetrating this fraudulent operation to justice,’‘ the department said in a statement.
The seamless collaboration between the intelligence formations of Karnataka and Kerala was instrumental in the success of this operation. The department said enforcement agencies remain resolute in their commitment to upholding the integrity of the taxation system.
