Officials of the Central GST have unearthed an alleged tax fraud of Rs 224 crore and detected fake invoices worth Rs 1,289 crore by a group of eight companies involved in the trade of iron and steel products.

A key suspect involved in the racket had been arrested and Rs 19.75 crore was recovered from him, a press release from the Hyderabad Central GST Commissionerate said on Tuesday night. Several documents were recovered during the simultaneous searches conducted at the residential and business premises of these companies on Tuesday night.

The companies had been generating fake invoices without actual supply of TMT bars, MS bars, MS flat products among others, and were passing on the input tax credit to other taxpayers within the same group, besides some other taxpayers since July 2017, it said.The fake invoices generated by them involved about Rs 1,289 crore of value and input tax credit of about Rs 224 crore.

These companies were also found to be indulging in circular fake trading to inflate their turnover, besides supplying such fake invoices and e-way bills to some others, the GST officials said.