Transport firm linked to minister issued notice in Rs 2,384 crore input tax credit scam

BENGALURU: After the Commercial Tax Department uncovered a Rs 2,384 crore fake Input Tax Credit (ITC) scam, it has now been revealed that buses of a transport company linked to an influential minister were allegedly used to transport material.

There are allegatiosn that fake bills were created and tungsten carbide scrap was shown as transported without any actual goods. Officials have issued summons to National Travels in connection with the case. The massive fraud came to light during inspection by officials. Fake bills were created without goods to claim refunds, causing losses of crores to the government exchequer.

The summons asks the transport company to provide clarification regarding the transportation of goods. They have been directed to respond within 15 days. Commercial Tax Department officials had been monitoring this for the past three months. Bills were entered in the e-way system, causing discrepancies in tax.

Vehicles registered as goods carriers in the e-way system were inspected. During this, it was found that only bills were generated without any actual goods. It came to light that this occurred with 60 to 70 vehicles over a three-month period. Fake bills were created showing goods transported from Bengaluru to other states.

The mobile phones and office laptops of the two arrested accused have been seized. They have already been sent to the FSL for data extraction after examination. Once the FSL report is received, those involved will face questioning.

Case background

The arrested accused are Salimulla Baig (59) and Haseen Baig (35). Suspicious transactions were conducted through 72 fake supply firms. Salimulla had availed Rs 382 crore in fake ITC through transactions worth Rs 2,172 crore. Similarly, Haseen had availed Rs 35 crore through transactions worth Rs 212 crore from 55 firms. With this, the total number of arrests in the case this year has risen to seven.

The accused allegedly committed fraud by creating fake tax bills and claiming ITC in the name of tungsten carbide scrap, e-waste, and other scrap. Officials are investigating after arresting the accused under the GST Act. During the probe, officials uncovered a network of 127 fake firms. It was revealed that Rs 420 crore in fake ITC was claimed from suspicious transactions worth Rs 2,384 crore.

SGS Traders’ turnover rose from Rs 50 crore to Rs 900 crore in three years, but there was no documentary evidence to support the increase in turnover. Based on this, officials confirmed that fake transactions had been carried out. Last January, officials had arrested five people in connection with transactions worth Rs 1,464 crore.