Rs 593 crore GST fraud busted in Bengaluru, mastermind arrested

In a major crackdown on Goods and Services Tax fraud, the Belagavi zonal unit of the Directorate General of GST Intelligence has unearthed a massive fake invoice racket worth nearly Rs 593 crore , exposing a well organised network that allegedly siphoned off crores through fraudulent input tax credit claims.

The operation began with a probe into a suspicious GST registration, which led officials to conduct multiple searches at premises linked to Star Tax Consultant in Bengaluru. What investigators discovered was a carefully constructed web of shell firms that existed only on paper.

According to officials, the network issued fake invoices without any actual supply of goods or services , enabling wrongful availment and passing on of input tax credit amounting to nearly Rs 235 crore . Several GST registrations were allegedly created and operated solely to generate bogus invoices and e way bills, allowing beneficiaries to claim fraudulent tax credits.

At the centre of the racket was Mohammad Saifullah, a registered GST practitioner identified as the mastermind. Investigators said he actively managed multiple shell GSTINs and orchestrated the issuance of fake invoices and e way bills in return for commission calculated as a percentage of the invoice value. He allegedly used online accounting software to track transactions routed through dummy entities with no genuine business activity.

Saifullah was arrested on February 24 in Bengaluru under Section 69 of the CGST Act, 2017 . He was produced before a special court for economic offences in Bengaluru, which granted transit remand for his transfer to Belagavi. He was later remanded to judicial custody by a Belagavi court.

Officials said the investigation is ongoing to identify more beneficiaries and determine the full scale of the fraud.