Hyderabad. The Central Goods and Services Tax (CGST) Secunderabad Commissionerate has unearthed an alleged fraudulent Input Tax Credit (ITC) claim amounting to ₹32.28 crore in Hyderabad and arrested a company director in connection with the case. According to officials, the accused allegedly availed ITC on the basis of fake invoices issued by companies that were either non-existent, non-functional or had cancelled GST registrations. The investigation is continuing.
The Anti-Evasion Branch of the CGST Secunderabad Commissionerate, under the CGST and Customs Zone, Hyderabad, carried out the action as part of an ongoing enforcement drive against fraudulent ITC claims. According to officials, the investigation examined financial transactions and GST records linked to a company based in the Musheerabad area. The company was engaged in the trading of TMT bars, steel pipes and tubes.
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During the investigation, officials found invoices on the basis of which the company had allegedly claimed a substantial amount of ITC. According to the investigating authorities, several of the firms shown as suppliers in these invoices were not genuine business entities. Some were allegedly non-existent or non-functional, while others had their GST registrations cancelled.
Field verification conducted by the jurisdictional authorities also raised questions about the existence and operations of the purported suppliers. Officials said no genuine business activity was found at their declared places of business. The findings allegedly indicated that the entities were being used to generate invoices without any corresponding supply of goods and facilitate wrongful availment of ITC.
The investigation further found that the company allegedly claimed ₹32.28 crore in ITC without actually receiving the goods mentioned in the invoices. Despite the absence of actual receipt of goods, the credit was allegedly utilised to discharge the company’s GST liability. Officials said such availment and utilisation of ITC was in contravention of the provisions of the Central Goods and Services Tax Act, 2017.
Based on the evidence gathered during the investigation and statements recorded by the authorities, the accused director was arrested on September 24 under Section 69 of the CGST Act, 2017. Following the arrest, the accused was produced before a Duty Magistrate and was remanded to judicial custody for 14 days.
Officials said further investigation is underway. One of the key areas being examined is the manner in which the companies allegedly issuing the fake invoices operated and whether other businesses or individuals were involved in the transactions. Investigators are also examining documents, financial records and other material linked to the alleged wrongful availment and utilisation of ITC.
Under the GST system, eligible Input Tax Credit allows a registered taxpayer to set off tax paid on qualifying purchases against its output tax liability. Authorities have been taking action against cases involving fake firms and invoices where there is allegedly no corresponding supply of goods or services. Such arrangements can be used to create paper transactions and claim tax credit without genuine underlying business activity.
In the Hyderabad case, the ongoing investigation will seek to establish the full extent of the alleged fraudulent transactions, identify the entities and individuals involved in the invoice chain and determine the precise tax liability arising from the transactions. The authorities will also examine the financial trail associated with the alleged ITC claims.
Further legal action will depend on the evidence gathered during the investigation and the findings regarding the role of the accused and other entities allegedly connected with the transactions.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
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