DGGI, Vizag zonal unit arrests operators for fake ITC racket

Visakhapatnam: Officers of the Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, have arrested T Venkata Swaroop Kumar, who has been identified as the operator of a fake Input Tax Credit racket run through a network of controlled firms. This is the first arrest made by DGGI, Visakhapatnam Zonal Unit during the financial year 2026–27. Investigation has revealed that these firms were projected as providers of works contract service providers but were in fact dummy concerns used for fraudulent availment and passing of input tax credit. This arrest is a follow-up to two earlier arrests in the same case, namely Mallikarjuna Manoj Kumar, identified as another mastermind of the network, and DN Srinivasa Reddy, Partner of Sri Progressive Projects , the principal beneficiary firm.Investigation has so far established that the firms controlled by the accused fraudulently availed ITC of Rs 9.62 crore and passed on fraudulent ITC of Rs 7.49 crore to Sri Progressive Projects. The entities were found to have no real capacity to execute works contract services of the nature and magnitude reflected in the invoices issued by them. Financial investigation further brought out systematic layering, circular routing of funds, and movement of money through controlled firms, indicating a pre-planned fraudulent arrangement.The accused has committed offences punishable under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017, which are cognizable and non-bailable under Section 132(5) of the Act. Accordingly, his arrest was approved by the competent authority under Section 69(1) of the CGST Act, 2017.