Fraud takes place where the fraudster intimates the company regarding the payment. The Director-General of GST Intelligence  arrested the former Managing Director and Chief Financial Officer of MSR India that manufactures Dr. Copper, a popular brand of copper bottles in a GST fake invoice fraud.

Sources in GST Intelligence said that the accused, VK Rajashekar Reddy, former MD of MSR India Limited had quit the company after a GST case was registered in March 2019. Hence, the principal allegation against the accused is that they took fake invoices to bloat the balance sheets of the company.

Additionally, a total of Rs 38 crore fraud has been detected by DGGI where it was found that Rs 19 crore of Input Tax Credit had been fraudulently obtained and another Rs 19 crore had been passed on by the company to others. MSR India has got contracts from the defense and aviation sectors.

Though Dr. Copper units are located in Bachupally, Jeedimetla, and Chetlapotharam areas in the city. The company currently has four directors. In 2002, the company incorporated.

In March 2019, DGGI sleuths arrested a GST practitioner, Rajesh Gandhi, a shareholder of Flora Corporation for allegedly running a fake invoice racket. Therefore, an investigation into the business transactions of Rajesh worth Rs 35 crore with no physical supply of goods revealed the involvement of MSR India.

Final Words

DGGI officials said while MSR India mostly deals with copper, invoices for milk and milk products and battery scrap.  DGGI seized fake letterheads in March from premises linked to Rajesh Gandhi. Therefore, he attempted to raise illegal input tax credit of Rs 6 crore with counterfeit invoices.

Additionally, the duo of Reddy and Gandhi will be produced in the court to be remanded to judicial custody.

DGGI officials have completed two phases of the drive against fake invoice rackets and unearthed links. That includes several top companies including infrastructure companies in AP and Telangana.