Rs 1,464-Crore Interstate Fake Billing Racket Busted In Karnataka

The Enforcement Wing (South Zone) of the Karnataka Commercial Taxes Department has busted an interstate fake billing racket involving transactions worth Rs 1,464 crore. The syndicate was involved in large-scale tax evasion through bogus trade in cement, iron, steel, and other construction materials across Karnataka and Tamil Nadu. Investigations so far have revealed wrongful availing of input tax credit (ITC) amounting to approximately Rs 355 crore.

The scam was unearthed using advanced GST analytics systems and the department's in-house Non-Genuine Taxpayers (NGTP) module. Analysis of GST back-office IP address trails revealed suspicious billing patterns and circular ITC transactions. Based on these findings, the department carried out coordinated search and seizure operations at multiple locations in Karnataka and Tamil Nadu.

The investigation revealed that the accused obtained multiple GST registrations using forged documents such as stamp papers purchased online, fake rental agreements, forged signatures of landlords and tenants, fabricated tax receipts, and bogus notary attestations. Using these shell companies, counterfeit invoices were generated, and circular transactions were shown to fraudulently claim ITC. After availing substantial tax benefits, the firms cancelled their GST registrations to evade audit trails.

The Enforcement Wing conducted simultaneous raids in Bengaluru, Chennai, Vellore, and Pernampattu, during which 24 mobile phones, 51 SIM cards, two pen drives, several bank statements, and seals of dozens of companies were seized. Officials believe these materials will provide vital evidence related to the racket's network and money trail.

Four main accused have been arrested in the case. They include two brothers from Tamil Nadu, Irbaz Ahmed and Nafeez Ahmed, who floated fake firms such as Tryon Traders, Wonder Traders, Royal Traders, and Galaxy Enterprises. The other two accused are from Bengaluru, Eddala Pratap and Smt. Revathi, who created firms including Power Steel and Cement, PR Construction, SV Traders, and SRS Cement Steel Traders.

All four accused were produced before the Special Court for Economic Offences in Bengaluru, which remanded them to 14 days of judicial custody.