Two held for Rs 107 crore GST fraud; another absconding
Valanchery (Malappuram): Two members of a gang that swindled a whopping Rs 107 crore by taking Goods and Services Tax (GST) registration in the name of others have been arrested.
Valanchery police Sub Inspector T. Manoharan said that this was the first GST input tax fraud in the state. Another gang member managed to escape.
The two were identified as Rashid Rafeeq (29) of Ponnani and his brother in law Faisal Nazar (24). The third gang member, Muhammad, escaped after learning that police had come to his house in search of him.
Police have registered cases against the duo for cheating and forging documents. The officials raided the house of the two and seized currency counting machines, cheque books and stamp papers.
The arrests were made following investigations based on a complaint by Yusuf of Valanchery. There are three GST accounts in the name of Yusuf. Police said that 15 others have been cheated by the two accused.
While Rashid Rafeeq was nabbed from Thiruvananthapuram, Faisal Nazar was nabbed from Bengaluru. Two police teams have gone to bring the two to Valanchery.
The gang was working based in Malappuram, Thrissur, Palakkad, Kozhikode, Wayanad and Kasaragod districts. They used the names of three registered companies – Y. S. Trading (Malappuram), Star Enterprises and Das Agencies (Ahmedabad).
How the fraud came to light
When GST officials came to the house of Ranjith, of Edayur in Valanchery, they learned that the accused were operating a company Raj Enterprises in his name. The accused swindled Rs 13 crore in the name of Ranjith alone.
The accused have swindled Rs 20 to Rs 30 crores each using the accounts of the cheated people. If the taxes and fines are taken into consideration, the victims will have to pay several lakhs.
Chief agent Muhammad approaches people who are seeking to earn revenue and helps them start areca nut (betel nut) business. Muhammad opens a GST account in their name and both start selling areca nuts to other states.
Muhammad says he has many businesses and insists that the taxes be paid through a single account. He offers them Rs 50,000 per month after three months. Using this account, the accused will show trade of goods worth substantial amount without actually moving any goods. The non-existing goods will be traded to companies in Delhi or Gujrat.
Police assume that the accused obtained the GST input tax of trading these non-existing goods in the following days.
GST officials collecting information
Meanwhile, State Tax officer at Malappuram, C. Sajesh said that they were collecting details of the fraud. He refused to comment stating that they needed to learn more about the fraud.