Visakhapatnam GST fraud: DGCI arrests key operator in Rs 27cr fake invoice scam

VISAKHAPATNAM: The officers of the Directorate General of the GST (Intelligence) DGCI, Visakhapatnam zone unit unearthed a network involved in fraudulent availment and passing on of input tax credit (ITC) on the strength of invoices, without any corresponding supply of goods or services, through multiple dummy entities.

The officials arrested Mallikarjuna Manoj KumarThe investigation so far has quantified the total fraudulent ITC availed at Rs27.07 crore and ITC passed on at Rs15.30 crore.On the basis of material gathered during the investigation, including statements recorded Mallikarjuna Manoj Kumar has been identified as the controller/ operator of the network. He admitted that transactions were carried out as per his directions and that the entities functioned solely for passing on ITC, without real business operations or actual supply.Financial analysis has revealed structured diversions and layering of funds linked to the network indicating planned routing and circulation of funds through multiple corridors.The network operated multiple dummy invoice only GST entities to obtain and issue tax invoices without any supply, falsely showing works contract services, manpower supply and constructions material. The resultant ITC was availed and passed on to beneficiary firms against receipt of invoice value through banking channels, while retaining a commission of about three percent and routing the balance through layered transfer for cash withdrawal and delivery through associates.