Andhra businessman arrested for Rs 6 crore input tax credit fraud

Visakhapatnam, Jan 10 (PTI) The DGGI has arrested a businessman for allegedly fraudulently availing input tax credit amounting to nearly Rs 6 crore.

The Visakhapatnam zonal unit of the Directorate General of GST Intelligence (DGGI) arrested DN Srinivasa Reddy, managing partner of Progressive Projects, on the basis of fake invoices issued without any corresponding supply of goods or services.

"The officers of the DGGI, Visakhapatnam Zonal Unit have detected fraudulent availment (availing) of input tax credit (ITC) amounting to Rs 5.83 crore by DN Srinivasa Reddy," said a release from the intelligence unit on Saturday.

As per DGGI's probe, input tax credit was availed through the issuance of non-existent and paper entities and in certain cases fake invoices were raised under the guise of sub-contracting of works by a dummy entity controlled by one Mallikarjuna Manoj Kumar.

According to the intelligence unit, Kumar had retained a commission of three per cent and routed the remaining money through mule accounts.

DGGI noted that Kumar was arrested earlier in the same case.

"Reddy was found to be the principal beneficiary of the fraudulent ITC. The offences committed attract the provisions of Section 132 (1) (C) of CGST Act, 2017, which are cognizable and non-bailable," the release said.

Reddy has been arrested under Section 69 of CGST Act, 2017.

Further, DGGI noted that this was the fifth arrest made by its Visakhapatnam Zonal Unit during FY26, targeting GST evasion and ITC frauds. PTI STH KH