The Directorate General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, has arrested T. Venkata Swaroop Kumar, identified as a key operator behind a fraudulent Input Tax Credit (ITC) network involving multiple controlled entities. This marks the first arrest by the Visakhapatnam Zonal Unit in the financial year 2026–27.
According to officials, the accused orchestrated a sophisticated racket by floating and managing several firms that were projected as legitimate providers of works contract services. However, investigations revealed that these entities were merely shell or dummy firms with no actual capacity to undertake the scale of projects reflected in their invoices. These firms were instead used as conduits for fraudulent availment and distribution of ITC.
The latest arrest follows two earlier apprehensions in the same case. Mallikarjuna Manoj Kumar, alleged to be another key mastermind, and D.N. Srinivasa Reddy, a partner in Sri Progressive Projects—the principal beneficiary firm—had previously been taken into custody.
Preliminary findings indicate that the network of firms controlled by the accused fraudulently availed ITC amounting to ₹9.62 crore. Out of this, fraudulent credit worth ₹7.49 crore was passed on to Sri Progressive Projects. Authorities noted that the transactions lacked any genuine business activity and were supported by invoices that did not correspond to actual supply of services.
A detailed financial probe uncovered a pattern of systematic layering and circular routing of funds through interconnected entities. This movement of money across controlled firms pointed to a well-planned scheme designed to evade GST and unlawfully avail tax benefits.
Officials stated that the accused has committed offences punishable under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017, which deal with fraudulent availment and utilisation of ITC. These offences are classified as cognizable and non-bailable under Section 132(5) of the Act. The arrest was carried out following due approval from the competent authority under Section 69(1) of the CGST Act, 2017.
The investigation is ongoing, and further arrests and recovery proceedings are expected as authorities continue to unravel the full extent of the racket.
