The Goods and Services Tax (GST) Department has arrested the Managing Director of Ecoren Energy India Pvt. Ltd., Lakshmi Prasad Yerneni (56), in connection with an alleged ₹64.5 crore Input Tax Credit (ITC) fraud. Authorities allege that the company fraudulently availed and utilised ITC by using fake tax invoices without any actual supply of goods or services, causing a significant loss to the government exchequer.
According to GST officials, the preliminary investigation indicates that the alleged fraud was carried out through a network of companies that generated fabricated transactions to illegally claim input tax credit. Investigators believe the network was designed to create the appearance of genuine business activity while exploiting the GST system through bogus documentation.
Officials said Yerneni was arrested in the early hours of Friday and later produced before the Economic Offences Court in Hyderabad. The court remanded him to judicial custody until August 7, following which he was lodged in Chanchalguda Central Prison for 14 days.
The accused has been booked under Sections 132(1)(c) and 132(1)(i) of the Central Goods and Services Tax (CGST) Act, along with the corresponding provisions of the State GST law. Since the alleged tax evasion exceeds ₹5 crore, the offence is classified as cognisable and non-bailable under the law.
During questioning, Yerneni allegedly admitted that the final authority for vendor onboarding, issuance of work orders and purchase orders, and approval of advance payments rested with him. Investigators claim that this authority was misused to approve transactions supported by fake invoices, enabling the company to claim fraudulent input tax credit without any genuine supply of goods or services.
Officials further allege that the fraud was executed through a network of interconnected companies. Funds were allegedly routed through multiple bank accounts to make the transactions appear legitimate. Financial records examined during the investigation have revealed the movement of money across several accounts, and authorities are now analysing the complete financial trail to identify the beneficiaries and the flow of funds.
The GST Department believes the case may extend beyond a single company. Investigators are examining the role of associated firms, suppliers and other entities suspected to be linked to the alleged fake ITC network. Digital records, banking documents, GST returns and invoices are also undergoing forensic examination to determine the exact extent of the fraud and the resulting loss to government revenue.
Tax experts say fraudulent input tax credit claims remain one of the biggest challenges for GST enforcement agencies across India. Such schemes often involve shell companies, fake invoicing, paper transactions and layered movement of funds to evade taxes and create the illusion of legitimate business operations. In recent years, enforcement agencies have increasingly relied on data analytics, e-invoicing systems, banking trails and digital audits to identify and dismantle such organised tax fraud networks.
Officials said the investigation is continuing and the entire financial trail is being scrutinised. If evidence reveals the involvement of additional individuals, companies or facilitators, further legal action will be initiated. Authorities aim to uncover the full extent of the alleged fake ITC network and bring all those responsible for the suspected tax fraud to justice.
