DGGI Arrests Four in Rs 293 Crore Fraud Involving Fake Entities
Visakhapatnam: Officers of the Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, have arrested a resident of Proddatur in YSR Kadapa district along with three others for allegedly floating 19 fake entities, resulting in a massive fraud of Rs 293 crore. The operation extended across multiple states including Kadapa, Kurnool, Bengaluru, and Hyderabad.
The primary accused, Manohar (34), and his accomplices created bogus entries at various levels across different states to mask the fraudulent transactions, according to investigating officials. They operated a complex network that generated fake invoices amounting to Rs 293 crore in taxable value.
The fraudulent activities involved the passing of fake Input Tax Credit (ITC) to various functional companies and firms, amounting to Rs 30 crore in GST, which allowed them to illegally avail and utilize credits, thereby evading genuine tax payments and inflicting a significant loss on the government exchequer. The arrest of the mastermind behind this bill trading scheme was authorized by the principal additional director of DGGI, VZU MRR Reddy. Manohar has since been presented before the Special Judge Economic Offences Court in Visakhapatnam on December 13, where he was remanded to judicial custody for 14 days.
An official statement highlighted that the DGGI remains vigilant and is consistently combating various strategies used for tax evasion, particularly through the establishment of fake companies and the resultant losses to public revenue.
“Fraudsters employ a multitude of techniques to evade the scrutiny of this agency, such as creating several layers of fake entities across different states. They exploit the credentials of unsuspecting and impoverished individuals by offering incentives for sharing sensitive personal information,” the statement noted.
In the financial year 2024-25, the Visakhapatnam Zonal Unit of DGGI has collected intelligence and initiated around 79 cases involving a taxable value of approximately Rs 465 crore and fake ITC/GST amounting to Rs 84 crore.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.