The Telangana Commercial Taxes Department has initiated the process to formally notify the Maharashtra government about a massive Goods and Services Tax (GST) input credit scam. The fraud, which revolves around the use of fake invoices and empty vehicle shipments, is estimated to have caused tax losses exceeding Rs. 100 crore.
At the center of the investigation is a Hyderabad-based firm that allegedly issued high-value tax invoices for copper consignments to a Maharashtra-based company—without dispatching any physical goods. Investigators have found that trucks shown as carrying large copper shipments were, in reality, dispatched empty from Telangana, while all documentation pointed to legitimate transactions.
Bogus Input Credit at the Core of the Scam
According to officials, the entire operation is rooted in fraudulent claims of input tax credit (ITC), a common but highly damaging method of GST evasion. These scams typically involve shell entities or paper companies issuing invoices for goods or services that were never actually supplied. The recipient companies then use these documents to wrongfully claim ITC, effectively cheating the government out of legitimate tax revenue.
In this case, the Maharashtra firm that received the bogus invoices claimed to have paid 18% GST and used the fake documentation to claim ITC. The fraud was compounded when that firm, in turn, issued similar false invoices to another company—again, without supplying any goods. This cascading model enabled multiple parties to claim credits on taxes that were never actually paid.
Department Widens Crackdown Across State Borders
Commercial Taxes Commissioner K. Haritha confirmed that Telangana authorities are now moving beyond identifying culprits within their own jurisdiction.
“We have shifted our strategy. While earlier our focus was on intra-state fraud, we now plan to inform other state governments as well about companies involved in such GST crimes. Coordination between states is essential to curb this growing menace,” she stated.
Commissioner Haritha also stressed the need for increased vigilance across states to dismantle fraudulent chains. “This kind of scam usually involves multiple entities across different states. If we intensify monitoring and collaborate with other states, we can disrupt these criminal networks,” she added.
Ongoing Enforcement Yields Big Results
Since April 25, the Telangana Commercial Taxes Department has intensified its enforcement efforts against GST fraud. So far, 304 fake GST cases have been detected, resulting in the blocking of ₹170 crore worth of fraudulent ITC. Notices totaling ₹49.7 crore have been served, and the department has already recovered ₹8.36 crore.
The department’s recent actions reflect a broader push to crack down on tax evasion, particularly in sectors known for high-value transactions and minimal physical verification.
As investigations deepen, officials expect more states to be drawn into the probe, which could eventually expose a nationwide network of companies engaging in large-scale GST fraud.
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