Hyderabad GST scam busted: Rs 6.25 crore ITC fraud via fake toy firm; FIR filed

HYDERABAD: Commercial tax department has uncovered a goods and services tax (GST) racket by a city-based proprietor through a fictitious toy-trading firm, illegally pocketing and passing on input tax credit (ITC) worth over 6 crore.A complaint filed by assistant commissioner (State Tax) G Narender Reddy on Monday stated M/s Bala Corporation, headed by N Vinod Kumar, obtained GST registration in Feb 2025 by uploading a forged electricity bill as proof of premises. The declared address at Cristal Complex in Hill Fort Street, Adarsh Nagar was found non-existent during a panchanama inspection of the department in May 2025.Although the firm had declared toys and video-game consoles as its business, e-way bill analytics of the company showed that in March and April 2025 it generated 1,268 outward consignments for portland cement, copper pipes, plywood, iron rods, and other construction materials.

"No corresponding inward bills were filed. During the two months, Bala Corporation used bogus documents to avail ITC of 6.25 crore under IGST and pass on 3.12 crore each in SGST and CGST to 32 other entities, despite zero reflection of the same in the auto-drafted ITC statement (GSTR-2B)," the complaint stated.The registration of the company was cancelled on May 9, 2025, with retrospective effect from Feb 25, 2025, but by then the exchequer had suffered a loss of 6.25 crore. The commercial tax department has notified concerned jurisdictional tax officers about the illegally availed ITC benefit, seeking immediate recovery.CCS police have registered a case against Bala Corporation and N Vinod Kumar. Evidence was being analysed to initiate legal action against the accused, an official said.