The officials of the Directorate General of GST Intelligence (DGGI) Visakhapatnam apprehended a mastermind in Rs. 31 crore fake input tax credit racket on Wednesday.

The 34-year-old resident of Hyderabad allegedly set up 20 fake entities of Input Tax Credit in Guntur district and also Hyderabad. These entities were used to create a complex network of fake Input Tax Credit (ITC) generating entities in different levels and spread along with different states in a bid to camouflage the fraudulent transactions and thereby avoid detection.

According to the Joint Director of Directorate General of GST Intelligence (DGGI)Yenneti Bhaskara Rao, these entities were managed by the arrested individual. He generated fake invoices to the tune of around Rs 265 crores, involving passing on fake ITC to many functional companies to the tune of Rs 31 Crores, enabling them to fraudulently utilize the same and evade payment of Taxes.

The accused was arrested for his involvement in running the fake invoice racket following the investigation of the issue. He was arrested on Wednesday and was presented at economic offenses court in Vizag which pronounced 14 days judicial remand. He was handed over to authorities of Central Prison at Adavivaram.

The joint director said that there has been a country-wide special drive against such fake ITC frauds by the DGGI and CGST since November 2020. The Visakhapatnam DGGI Zonal Unit has booked several cases unearthing nearly180 fake companies set up, leading to detection of tax evasion to the tune of Rs 160 crores. It has also arrested five individuals in the past two years and recovery of Rs 60 crores has also been made during the investigations.

Source: The Times of India