DGGI Visakhapatnam Makes First Arrest of FY 2026-27 in Major GST Fraud Case
In a significant crackdown on financial crime, officers from the Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, have arrested T Venkata Swaroop Kumar. He has been identified as the key operator of a sophisticated fake Input Tax Credit (ITC) racket that utilized a network of controlled firms to perpetrate large-scale fraud.
Details of the Fraudulent Network and Earlier Arrests
This arrest represents the first made by the DGGI Visakhapatnam Zonal Unit during the financial year 2026–27. It follows two previous arrests in the same extensive case. Earlier, authorities apprehended Mallikarjuna Manoj Kumar, who was identified as another mastermind behind the fraudulent network. Additionally, DN Srinivasa Reddy, Partner of Sri Progressive Projects, was arrested as the principal beneficiary firm in this scheme.
Investigations have uncovered that the firms controlled by the accused were falsely projected as providers of works contract services. In reality, these were dummy concerns with no genuine capacity to execute works contract services of the scale indicated on their invoices. Their sole purpose was the fraudulent availment and passing of input tax credit.
Massive Financial Fraud Uncovered
The probe has so far established staggering financial misconduct. The controlled firms fraudulently availed ITC amounting to Rs 9.62 crore. Furthermore, they passed on fraudulent ITC of Rs 7.49 crore to Sri Progressive Projects, amplifying the economic damage.
Financial investigation techniques revealed a complex web of deceit, including systematic layering, circular routing of funds, and movement of money through the controlled firms. These patterns clearly indicate a pre-planned and meticulously organized fraudulent arrangement designed to evade detection.
Legal Charges and Arrest Authorization
The accused, T Venkata Swaroop Kumar, has committed offences that are punishable under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017. These sections pertain to serious GST fraud involving false invoices and wrongful availment or utilization of input tax credit. Notably, these offences are cognizable and non-bailable under Section 132(5) of the Act, reflecting their gravity.
Accordingly, his arrest was formally approved by the competent authority under Section 69(1) of the CGST Act, 2017, which empowers officers to arrest persons believed to have committed offences punishable under the Act. This legal step underscores the authorities' commitment to rigorous enforcement against tax evasion and financial fraud.
The arrest highlights the ongoing efforts by DGGI to combat GST fraud and protect government revenue through decisive action against organized criminal networks.
