DGGI arrests miner for Rs 6.59-cr GST fraud

Officials of the Directorate-General of GST Intelligence (DGGI), Visakhapatnam Zonal Unit, arrested the proprietor of Labbaik Minerals on Saturday for allegedly availing and utilising fake Goods and Services Tax (GST) Input Tax Credit (ITC), resulting in a loss of Rs 6.59 crore to the government exchequer.

According to DGGI officials, the arrest followed inspections conducted into the firm’s supply chain. “During verification of the suppliers associated with Labbaik Minerals, it was found that several entities had obtained GST registrations by submitting forged documents, including fake rental agreements and fabricated records,” an official said.

The accused, identified as Sheik Shabbir, a resident of Nandyal district, allegedly availed and utilised ITC on the basis of invoices raised by these non-existent or non-functional suppliers. “The invoices were used to claim input tax credit without any actual supply of goods, leading to wrongful reduction of GST liability,” the official added.

Officials said the transactions were structured to give the appearance of legitimate business activity while bypassing tax obligations. “Such practices not only violate GST laws but also cause significant revenue loss to the exchequer,” the official said.

Following his arrest, Sheik Shabbir was brought to Visakhapatnam and produced before the Special Judge for Economic Offences. “The court remanded the accused to judicial custody for 14 days,” the official said, adding that further investigation was under way to identify other entities involved in the alleged fraud and to assess the total extent of the revenue loss.