The Directorate General of GST Intelligence (DGGI) in Visakhapatnam on Monday arrested a 48-year-old man who allegedly set up over 70 dummy companies and issued duplicated invoices to the tune of Rs 400 crore. The accused, was identified as Vennapusa Subba Reddy, who also reportedly indulged in availing fraudulent input tax credit (ITC) worth Rs 60 crore without supplying any goods.
Speaking to reporters, Visakhapatnam DGGI Joint Director Mayank Sharma said that in coordination with their Hyderabad counterparts, raids were conducted in Hyderabad, Guntur and Bhimavaram, where officials found several pieces of evidence, including around 30 dummy firms with blank cheque books under their names, besides duplicate invoices, which were registered on PAN and Aadhar card details of Reddy's acquaintances.
The DGGI Joint Director also said that this was one of the biggest GST frauds uncovered by them in recent times.
“Upon interrogation, V VSubba Reddy confessed to having facilitated raising fake invoices using such dummy firms and the generation of the fraudulent input tax credit without actual supply or receipt of goods. The accused opened and operated several bank accounts in the names of the dummy firms from a single branch in Guntur. In this connection, more than 30 bank accounts and 2 lockers have been attached to safeguard government revenue,” a GST officer was quoted as saying.
Media reports suggest that preliminary quantification of 21 firms showed that almost Rs 400 crore worth of duplicate invoices were allegedly generated by Reddy and his associates between July 2017 to January 2019.
The accused was presented in front of a local magistrate and sent to judicial custody under provisions of the law for GST fraud until March 26. Officials said that further investigation is ongoing and more details would be revealed soon.