The CGST, Chennai North Commissionerate arrested two persons for GST fraud involving fake ITC of Rs. 10.64 Crore in Iron and Steel Scrap Trading business.
Officers of the CGST Chennai North Commissionerate have busted a major fake GST invoice racket, that was operated to fraudulently pass on Input Tax Credit (ITC) worth approximately Rs. 10.64 crore on bogus invoices valued at about Rs. 59 crore. The Commissionerate has arrested two key persons involved in this large-scale tax evasion racket of M/s MKN ENTERPRISES. One of the arrested individuals is the proprietor of the firm engaged in availing and passing on fake ITC, while the other is his associate who was actively involved in the issuance of fake GST invoices.
Based on detailed analysis of data available on the GST portal, the Anti-Evasion Wing of CGST Chennai North Commissionerate initiated an investigation against the said firm. The investigation revealed that the firm had fraudulently availed ITC of Rs. 10.38 crore and passed on ITC of Rs. 10.64 crore without any actual supply or receipt of goods. The fraudulent transactions were carried out through bogus invoices amounting to approximately Rs. 59 crore, in clear violation of the provisions of the CGST Act, 2017. Preliminary findings indicate that a network of more than 90 business entities, spread across Chennai, is involved in this tax fraud. Further investigation is underway to identify the beneficiaries and trace the flow of funds. So far recovery made in this case is Rs.42 Lakhs.
Based on material evidence gathered and the admission of their involvement in the fraud, both accused were arrested on 11.10.2025 under Section 69 of the CGST Act, 2017 for committing offences punishable under Section 132 of the Act. They were produced before the Additional Chief Metropolitan Magistrate, Economic Offences-II, Egmore, Chennai, who has remanded them to judicial custody for 14 days.
Further investigation is under progress to recover the evaded tax amount.
