Bengaluru, India – July 2025: In a significant crackdown on GST fraud, the Karnataka Commercial Taxes Department has exposed a massive inter-State fake billing racket involving bogus Input Tax Credit (ITC) claims worth ₹39 crore. The primary accused, identified as Kailash Bishnoi from Jalore district, Rajasthan, was arrested in Bengaluru following an extensive investigation.
Fake Billing Racket Across Multiple States
According to department officials, Bishnoi masterminded the creation of 17 fake firms in Karnataka that reportedly generated a fraudulent turnover of ₹208 crore, enabling unlawful ITC claims by certain manufacturers. These firms, operating under fabricated GST registrations, were part of a well-organized network of bogus entities across several states, including Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana, Andhra Pradesh, Tamil Nadu, and Karnataka.
Fabricated Identities and Bogus Transactions
The investigation revealed that Bishnoi and his associates fabricated Aadhaar cards, PAN cards, and other KYC documents to set up multiple bank accounts and generate fake GST invoices—primarily for metal scrap transactions. These invoices falsely indicated the movement of goods to facilitate fraudulent ITC claims by recipient businesses.
In September 2023, an attempt by the group to open 10 bank accounts at HDFC Bank’s Murugeshpalya branch in Bengaluru using fake documents was flagged by the bank’s manager, prompting a complaint to the Jeevan Bima Nagar police. This complaint triggered deeper investigations leading to the bust.
Widespread Hunt and Arrest
The joint operation was led by the South Zone and Vigilance Division of the Commercial Taxes Department along with the Bengaluru East police. Despite Bishnoi’s continuous efforts to avoid arrest by frequently changing locations and using 14 different mobile numbers, officials finally tracked him down. He was arrested under a warrant issued by the Special Court for Economic Offences, Bengaluru.
Sources say that digital evidence, mobile data, and inputs from the arrest of his associate Rohit alias Rohtash in December 2024 played a key role in locating him.
Ninth Major GST Fraud Case in 15 Months
This arrest marks the ninth major GST fraud case unearthed by the Karnataka Commercial Taxes Department in just the last 15 months. Officials reaffirmed their commitment to cracking down on tax evasion and protecting the interests of genuine taxpayers and the State’s revenue.
Ongoing Investigation
Authorities are currently analyzing the scope of Bishnoi’s activities, which may uncover significantly larger financial frauds spanning multiple states. Investigations continue as officers delve deeper into the financial trail, associates, and end beneficiaries of the fake ITC scheme.