In a significant crackdown on tax evasion, the Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, has arrested four individuals, including a resident of Proddatur in YSR Kadapa district, for orchestrating a Rs 293 crore GST fraud. The arrested accused, identified as Manohar (34) and his accomplices, floated 19 fake entities to generate fraudulent invoices and evade taxes, causing a major loss to the government exchequer.
The fraud, which spans across multiple states—Kadapa, Kurnool, Bengaluru, and Hyderabad was executed through bogus entries and multi-level fake transactions. According to investigating officials, the accused created a complex network to issue fake invoices worth Rs 293 crore in taxable value and passed on fake Input Tax Credit (ITC) amounting to Rs 30 crore. This enabled functional businesses to fraudulently claim and utilize ITC to evade genuine GST payments.
The principal additional director of DGGI, VZU, MRR Reddy, authorized the arrest of Manohar, the mastermind behind the bill trading scam. He was produced before the Special Judge Economic Offences Court in Visakhapatnam on December 13 and was remanded to judicial custody for 14 days.
An official statement from DGGI highlighted the growing challenge of tax fraud, stating:
"Fraudsters are exploiting the credentials of gullible individuals by offering incentives for sharing personal data and are creating fake entities across multiple states. DGGI remains vigilant and continues to battle such tax evasion techniques to safeguard public revenue."
The DGGI Visakhapatnam Zonal Unit has been actively combating GST evasion through intelligence collection and enforcement. In the current financial year 2024-25 alone, the unit has booked around 79 cases involving taxable value of approximately Rs 465 crore and fake ITC/GST worth Rs 84 crore.
The arrests mark a significant step in the ongoing efforts of the DGGI to curb fake ITC frauds, which undermine the GST system and deprive the government of crucial revenue.
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