GST officials have unearthed a racket involving fake invoicing worth Rs 1,600 crore that resulted in tax evasion of Rs 241 crore, an official release said in a statement on Thursday.

The main culprit was arrested and remanded in 10 days of judicial custody by a local court, the release by Finance Ministry said.The alleged racketeer had created several firms on the basis of unauthorised access to identity documents of various persons.

The ministry said the Commissionerate discovered the case of fake invoicing and GST fraud alongside a “new modus operandi” of defrauding the exchequer by exploiting the facility of refunds given for inverted duty structure.

It further said investigations in the case have unearthed a well organised racket of creating bogus firms, issuing fake invoices and bogus e-way bills to generate and encash tax credits.

The new modus operandi was uncovered by a team of investigators, who worked over many weeks to unearth the maze of companies created across India, the ministry said.