Chennai: The GST and Central Excise Department, Chennai Outer, on Friday, arrested two people in connection with a Rs 118 crore GST credit fraud.

An official release here said, a 34 year-old man from North Chennai and a 46-year-old from Villivakkam were arrested for committing a massive GST fraud, by issuing fake invoices to the extent of Rs 776 crore and passing on illegal and unlawful Input Tax Credit, to the extent of Rs 118 crore.

The arrests were made after carrying out a detailed probe and conducting searches at several premises, to gather incriminating evidence.

The arrested were produced before Economical Offences Judge 1, Egmore, and remanded in judicial custody.

The arrested duo, along with some accomplices, have taken GST registration in the name of other persons by using fabricated/ forged KYC documents.

One of the arrested persons was also acting as a consultant to prepare all the documentation, including invoices for the fictitious firms floated to commit GST credit frauds.

These fictitious companies issued tax invoices to various business entities without supplying any goods or services, for a commission, and facilitated fraudulent availment of GST credit by these business entities.

GST on such bogus invoices was also paid using illegal input tax credit, based on fraudulent tax invoices received from some other fictitious companies opened by the accomplices of the arrested persons.

In the process, GST credit fraud of Rs 118 crore on Invoice value of Rs 776 crore was committed by the arrested persons along with their accomplices.