In this connection, more than 30 bank accounts and two lockers have been attached to safeguard government revenue
The Directorate General of GST Intelligence (DGGI), Visakhapatnam, on Monday arrested 48-year-old Vennapusa Subba Reddy, the mastermind behind setting up of 70 dummy companies and issuing duplicate invoices to the tune of Rs 400 crore and fraudulent input tax credit (ITC) availment of Rs 60 crore without supplying goods.
This was one of the biggest GST frauds detected in recent times by DGGI, said Visakhapatnam DGGI Joint Director Mayank Sharma.
In coordination with officers of DGGI, Hyderabad, searches were conducted in Guntur, Bhimavaram and Hyderabad and seized signed blank cheque books of around 30 dummy firms, duplicate invoices and bank account details.
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Upon interrogation, Reddy confessed to having facilitated issuing of duplicate invoices using dummy companies and generated fraudulent ITC without actual supply or receipt of goods. These companies were registered based on PAN and Aadhar card details of known acquaintances of Reddy.
GST registrations made them stronger
After obtaining GST registrations in their names, massive amounts of transactions had taken place on paper basis. Reddy opened and operated several bank accounts of the companies from a single branch in Guntur.
In this connection, more than 30 bank accounts and two lockers have been attached to safeguard government revenue.
Preliminary quantification of 21 firms revealed that from July 2017 to January 2019, almost Rs.400 crore worth of duplicate invoices were generated and the resultant ineligible ITC arising out of fraudulent transactions were being utilised by established companies based in Telangana and Andhra Pradesh.
Officials arrested Reddy under provisions of GST and remanded him to judicial custody till March 26. Further investigation is on.
70 dummy companies and issuing duplicate invoices to the tune of Rs 400 crore and fraudulent input tax credit (ITC) availment of Rs 60 crore without supplying goods have costed him a very big mistake.