The Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, has uncovered a major fake ITC racket involving fraudulent claims worth Rs 27.07 crore and has arrested the key person behind the network.
According to officials, the investigation has so far established that the accused entities fraudulently availed ITC amounting to Rs 27.07 crore, out of which Rs 15.30 crore was illegally passed on to other firms. The racket was allegedly operated through a web of dummy firms created solely to generate and circulate fake invoices, without any actual supply of goods or services.
Key Accused Identified as Network Operator
Based on evidence collected during the investigation, including statements recorded under the GST law, Mallikarjuna Manoj Kumar was identified as the controller and operator of the fake ITC network. He reportedly admitted that all transactions were carried out under his instructions and that the firms involved had no genuine business activities.
"The entities were created exclusively for passing on fraudulent ITC and did not undertake any real commercial operations," said Swethaa Suresh, Deputy Director, DGGI, Visakhapatnam, while confirming the arrest.
Booked Under GST Law Provisions
The accused has been booked under various provisions of the Central Goods and Services Tax (CGST) Act, which deal with wrongful availment and utilisation of ITC, issuance of fake invoices, and tax evasion. Further investigation is underway to identify additional beneficiaries and recover the wrongful credit passed on through the network.
Fourth Arrest This Financial Year
This arrest marks the fourth arrest by the DGGI, Visakhapatnam Zonal Unit, in the current financial year, highlighting the department's continued crackdown on fake ITC frauds and GST evasion.
Tax authorities have reiterated that strict action will be taken against those involved in creating and using fake invoices, and businesses are advised to conduct proper due diligence before availing ITC to avoid legal consequences.
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