The Visakhapatnam zonal unit of the Directorate General of GST Intelligence has arrested an individual named Eliyaz Basha in connection with a fraudulent Input Tax Credit racket valued at 19.79 crore. The accused allegedly utilized a business entity based in Hindupur, Andhra Pradesh, to facilitate the scheme. According to authorities, the operation involved issuing fake invoices without the actual physical supply of any goods, a tactic designed to enable multiple recipient entities to evade taxes.
Investigators discovered that the accused operated through a firm known as Dawood Hardware and Cements. While the business reportedly belongs to his brother, officials allege that Basha used the entity as a front to generate fraudulent paperwork. By providing these invoices to various firms without delivering the underlying materials, he allowed those companies to claim illicit tax credits in direct violation of the Central Goods and Services Tax Act of 2017. Following the discovery of substantial evidence, the agency moved to arrest him for committing what is classified as a cognizable and non-bailable offense.
Directorate General records second arrest of new fiscal year
The arrest marks a significant early milestone for the regional enforcement unit in the current financial cycle. Officials confirmed that this is officially the second arrest recorded for the 2026-27 fiscal year. It follows the apprehension of T. Venkata Swaroop Kumar, whose arrest was announced by the same unit on April 2. This new cycle of enforcement comes on the heels of a highly active previous year for the Visakhapatnam zonal unit, which has been aggressively targeting financial crimes and systemic tax evasion.
During the 2025-26 fiscal year, the unit successfully detected prima facie fraud exceeding 352 crore. That period saw the arrest of eight individuals involved in various tax-related crimes. The current case involving Basha suggests that the agency is maintaining its momentum as it enters the new financial period. Authorities are focusing on high value cases where shell companies or legitimate front businesses are used to undermine the integrity of the national tax system through the fabrication of trade documents.
Judicial custody and ongoing network investigations
After his arrest, Basha was produced before the Court of Economic Offences. Under the provisions of the Bharatiya Nagarika Suraksha Sanhitha 2023, he was remanded to judicial custody for a period of 14 days. The use of this specific legal framework highlights the application of updated criminal procedural codes in addressing major economic crimes. Legal proceedings are expected to continue as the agency prepares its formal case against the accused based on the evidence gathered from the Hindupur firm.
While Basha is currently in custody, the investigation is far from over. DGGI officials have indicated that further inquiries into the broader network of recipient entities are currently underway. The agency is working to identify every firm that benefited from the fake invoices issued by Dawood Hardware and Cements. By tracing the paper trail from the Hindupur front to the final claimants, investigators hope to recover the evaded revenue and hold all participating parties accountable for their role in the 19.79 crore racket.
