Andhra Pradesh: ‘Granite gang’ floats 278 fake companies, evades Rs 86 crore GST

Prakasam Superintendent of Police Siddharth Kaushal addressing the media in Ongole on Saturday.

VIJAYAWADA: Prakasam district police on Saturday busted an illegal granite transport racket and arrested 16 persons. The racket involved evasion of about Rs 86 crore tax to the government by transporting granite worth of Rs 900 crore over two and a half years by creating 278 fake companies.

Cops registered a case based on a complaint by assistant commissioner of commercial tax VP Srinivas. During investigation, cops found the racketeers had created 278 fake companies to evade goods and services tax (GST) and mining cess to the state government.

According to Prakasam district superintendent of police Siddharth Kaushal, one Jampani Venkata Subbarao alias Subbu wasthe mastermind behind the racket.

He along with Amaraneni Venkateswarlu, Yalaka Ravi and Shaik Raffi collected Aadhaar cards, identity proofs, address proofs and PAN cards of innocent persons to float companies.

They had floated 278 fake companies using these documents with 17 email addresses and 26 mobile numbers. The modus operandi of the gang is to acquire GST numbers using the fake companies to generate e-way bills.

Taking advantage of the State government’s Ease of Doing Business policy, they had allegedly floated 278 fictitious firms and generated Taxpayer Identification Numbers (TINS) with the help of forged documents including rental agreements, Aadhaar cards, PAN cards, electricity bills and bank account passbooks, the SP said.

The offenders had allegedly evaded payment of commercial tax and mining royalty to the tune of ₹100 crore by transporting 6.38 lakh square feet of mined material through fake bills. They had concealed the volume and value of the mined material and generated 25,000 E-waybills after creating 17 email accounts using 26 mobile phones.

The gang sold these 278 companies to 19 different groups for Rs 35,000a company. These groups headed by Pathan Arifulla,Dariya Vali, Shaik Shabbir, Shaik Pathan Jani, Peddishetti Ravi Kumar, Kallepalli Shiva, Gurramkonda Bhargav, Challagonda Karthik and Gurramkonda Bhargav generated e-way bills.

These groups also comprises granite markers from various states like Maharashtra, Rajasthan and West Bengal. They used to pilot the trucks loaded with granite stones till Andhra Pradesh border by colluding with local politicians and officials.

The racket used one of the provisions in GST that one can pay GST two months after generating e-way bill. With fake companies they created, these groups generated 18,239 e-way bills to transport nearly Rs 900 crore worth granite. They used to wind up operations of a company after two months generating many bills.

The issue came to light after notices sent by GST officials returned. During field verification officials found the companies do not exist at registered addresses and credentials given to register the companies were fake.

Cops arrested 16 persons involved in the racket and identified 103 others connected with the network. Addanki inspector T Ashok Vardan led the investigation under supervision of Chirala DSP Y Jaya Rama Subba Reddy.

Source: TNN | Jan 12, 2020,

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