Hyderabad: Investigators have uncovered a fake GST invoice racket allegedly involving nearly ₹72 crore in fraudulent Input Tax Credit, with Khasim Ali arrested as the suspected mastermind of the network. Authorities said the operation was run under the cover of the battery scrap trade and involved shell entities, bogus invoices and fabricated e-way bills without actual movement of goods.
Shell Firms Used To Generate Fake ITC
According to investigators, the racket operated through a network of non-existent GST entities and fabricated commercial transactions. Several firms shown as suppliers allegedly existed only on paper and had no genuine business activity.
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These entities allegedly issued fake invoices and e-way bills without any real supply of goods. The documents were then used to generate and pass on fraudulent Input Tax Credit to various business entities.
Officials said the purpose of the network was to create artificial tax credits through sham transactions and circulate them among beneficiary firms. The fake billing chain was allegedly layered to conceal the identity of the final beneficiaries.
Digital Records Led Investigators To Accused
During the probe, authorities examined electronic devices, digital records, banking documents and transaction data. Evidence gathered during the investigation pointed to Khasim Ali as a key figure behind the operation.
Investigators allege that Ali worked with brokers and associates to create fake invoices and e-way bills in the names of shell companies. GST returns were then allegedly filed to give legitimacy to the fraudulent tax credits.
After collecting evidence, officials arrested Ali and produced him before an Economic Offences Court. The court remanded him to judicial custody for two weeks.
Wider Business Links Under Scrutiny
Investigators are now examining Ali’s financial transactions, business contacts and the possible involvement of others linked to the network. Authorities believe the case may extend beyond a few shell companies and a single accused.
Officials are tracing the movement of fraudulent ITC to identify recipient firms and determine which business entities may have benefited from the scheme. The role of a major Hyderabad-based company is also reportedly under examination.
Authorities are scrutinizing bank accounts, GST returns, e-way bill records and financial trails connected to the suspected entities. Investigators believe further arrests are likely as the probe continues into the alleged ₹72 crore fake ITC fraud.
