VISAKHAPATNAM: Officers of the Directorate General of GST Intelligence (DGCI), Visakhapatnam zone, have busted a network involved in the fraudulent availing and passing on of input tax credit (ITC) using fake invoices without any actual supply of goods or services. A key operator, Mallikarjuna Manoj Kumar, has been arrested in connection with the case.
Officials said the investigation has so far quantified fraudulent ITC availed at Rs 27.07 crore, while Rs 15.30 crore was illegally passed on to beneficiary firms. Based on evidence collected during the probe, including statements recorded, Mallikarjuna Manoj Kumar was identified as the controller and operator of the entire network.
According to DGCI officials, the accused admitted that transactions were carried out under his directions and that the entities existed solely to facilitate the transfer of ITC, with no real business activity or actual supply involved.
A financial analysis revealed structured diversion and layering of funds linked to the network, indicating a planned circulation of money through multiple channels. The racket allegedly operated several dummy GST-registered entities that issued invoices showing works contract services, manpower supply and construction materials without any supply.
The fraudulent ITC generated through these invoices was availed and passed on to beneficiary firms against receipt of invoice amounts through banking channels. The operators reportedly retained a commission of about three per cent, while the remaining amount was routed through layered transfers for cash withdrawal and delivery via associates.
Further investigation is under way to identify other beneficiaries and trace the proceeds of the fraud in Visakhapatnam.
