Mastermind behind GST fake invoice fraud worth Rs 400 crore held by DGGI Vishakapatnam

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Director General of GST Intelligence sleuths of Vishakapatnam on Tuesday arrested a mastermind behind fake invoices fraud to the tune of Rs 400 crore. The accused identified as Vennapusa Venkata Subba Reddy floated 70 shell firms and issued fake invoices to the tune of around Rs 400 crore and availed Rs 60 crore worth fraudulent input tax credit without an actual supply of goods.

DGGI Joint Director Mayank Sharma said that this is one of the biggest GST frauds detected in recent times by GGGI Vishakapatnam. DGGI Vizag in coordination with officers of Hyderabad conducted searches in Hyderabad, Bhimavaram and Guntur and seized signed blank cheque books of 30 dummy firms, fake invoices and bank account details.

The accused VV Subba Reddy confessed to GST sleuths that he facilitated the raising of fake invoices using the shell fears and generated illegal input tax credit without supply or receipt of goods. “The dummy firms are registered based on PAN and Aadhaar details of known acquittance of accuse. After obtained GST registration in their names, massive amounts of the transaction had taken place on a paper basis. The accused opened and operated several bank accounts of the dummy firms form a single branch in Guntur. More than 30 bank accounts and two lockers were attached for safeguarding the government revenue,” said Mayank Sharma.

As per the preliminary quantification of 21 firms revealed that from July 2017 to January 2019 almost Rs 400 crore worth of fake invoices were generated. The ITC availed through fraudulent transactions are used by big infra companies in AP and Telangana. The accused was remanded to judicial custody till March 26. GST officials said that the investigation is still in progress. The officials will serve notices to the infra companies that got the fake invoices from the companies floated by Vennepusa Venkata Subba Reddy. GST Intelligence sleuths are verifying whether there are any foreign companies in the name of the accused.

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