Both the accused were arrested under the provisions of the GST Act. | Photo credit: Getty Images
In a major crackdown on GST fraud, the Enforcement Wing (South Zone) of the State Commercial Taxes Department in coordination with the Service Analysis and Intelligence Department has unearthed a massive fake ITC (Input Tax Credit) cartel involving fraudulent transactions worth ₹2,384 crore. Two key accused were arrested in Bengaluru.
Acting on specific intelligence, officials uncovered a highly organized false billing scam that allegedly operated through shell companies dealing in tungsten carbide scrap, electronic waste and other waste materials.
According to the department, Saleemulla Baig, 49, owner of SKS Traders, allegedly used fake ITCs through 72 bogus supplier entities involving a suspicious business turnover of nearly ₹2,172 crore and fraudulent ITC claims of around ₹382 crore.
Similarly, Hassain Baig, 35, associated with KH E-waste Recycler in Nayandahalli, was found to have availed bogus ITCs from 55 fake supplier entities with a suspected turnover of around ₹212 crore and fraudulent ITCs of nearly ₹38 crore.
Both the accused were arrested under the provisions of the GST Act.
Officials said the investigation has so far uncovered a fake billing network involving 127 bogus entities, which are collectively linked to suspicious transactions worth around ₹2,384 crore and fraudulent ITC claims totaling nearly ₹420 crore.
Investigators also found that one of the main firms in the network showed an abnormal increase in declared turnover from around ₹50 million to ₹945 million over three financial years, despite the lack of adequate business infrastructure or evidence of actual movement of goods, suggesting extensive paper-based transactions and circulation of fake tax invoices.
A significant portion of the fraud allegedly involved tungsten carbide scrap transactions, along with electronic waste and scrap trading. The tungsten carbide transactions alone accounted for a suspicious turnover of nearly ₹217 crore and false ITC claims of about ₹39 crore.
The department further revealed that whenever the authorities initiated action such as ITC blocking or issuing notices, the accused allegedly cheated new fake firms to continue the fraudulent activities and avoid detection.
The operation is jointly supervised by the Additional Commissioner of Commercial Taxes (Enforcement) and the Additional Commissioner of Commercial Taxes, Service Analysis and Intelligence Branch.
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Published – 13 May 2026 20:08 IST
