The Directorate General of GST Intelligence (DGGI), Visakhapatnam zonal unit, has arrested DN Srinivasa Reddy, managing partner of Hyderabad-headquartered telecommunications firm Sri Progressive Projects, for allegedly availing fraudulent input tax credit (ITC) worth ₹5.83 crore.
Reddy was produced before a court and remanded to judicial custody on Saturday, officials said.
Fake Invoices Used to Claim Fraudulent ITC
According to DGGI officials, Reddy claimed ITC on the strength of invoices issued by non-existent firms registered at addresses in Telangana and Andhra Pradesh. These entities had neither supplied goods nor rendered any services.
Investigators said the invoices were generated solely to pass on ineligible ITC, resulting in significant revenue loss.
Subcontracting Cover and Dummy Entity Exposed
The probe revealed that several bogus invoices were raised under the cover of subcontracting arrangements through a dummy entity controlled by Reddy’s associate, Mallikarjuna Manoj Kumar, a Hyderabad resident.
Kumar allegedly retained a three percent commission and routed the remaining funds through a network of mule bank accounts. He was arrested in Hyderabad on December 22 and remanded to judicial custody in Visakhapatnam the following day.
Arrest under Central GST Act
Reddy has been booked under Section 132(1)(c) of the Central GST Act, 2017, which categorises fraudulent ITC claims as cognisable and non-bailable offences. He was arrested under Section 69 of the CGST Act.
Fifth Arrest by DGGI Visakhapatnam This Fiscal
This arrest marks the fifth action taken by the Visakhapatnam zonal unit of the DGGI in the current financial year, underscoring stepped-up enforcement against GST fraud and fake invoicing networks.
Source: TOI