A major inter-state GST fraud racket involving fake invoices and e-way bills has been unearthed, with one accused arrested from Pune. The case has exposed a well-organised network that allegedly siphoned off more than ₹100 crore in tax revenue through bogus firms and fraudulent input tax credit (ITC) claims.
The case is linked to an FIR registered in the Indira Nagar area of Lucknow, where the investigation led to the unravelling of this large-scale operation. Acting on specific inputs, investigators traced one of the gang members to the Viman Nagar locality in Pune and carried out a successful arrest. Several other members of the network are still on the run.
During interrogation, it emerged that the arrested accused was working in coordination with associates identified as Raees, Keshwani, Abbas Hussain, Ramzan Ali and Muntazir. The group was reportedly engaged in accountancy-related work in Maharashtra and Gujarat, using that front to set up and operate a chain of fake firms.
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How the racket operated
Investigators revealed that the gang created bogus firms using forged documents and fake identities. These firms existed only on paper and were used to generate fake sales invoices and e-way bills without any actual movement of goods. These fabricated transactions were then uploaded on the GST portal to create an appearance of legitimate business activity.
Genuine traders would purchase these fake invoices to claim input tax credit, thereby significantly reducing their tax liability. In return, the gang charged commissions for facilitating these fraudulent transactions. This practice directly impacted government revenue by enabling large-scale tax evasion.
The entire operation was run in a highly organised and digital manner. Traders would share their GST details, product descriptions and transaction requirements via WhatsApp. Based on this information, the gang would quickly generate fake invoices. Bank accounts were used to give a veneer of legitimacy to transactions, while the actual money trail was often adjusted through cash dealings or circular trading methods.
Multi-state network with deep digital footprint
According to investigators, the racket had established dozens of fake firms across multiple states, including Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh, Delhi and Bengaluru. These entities were used to route fake transactions worth crores of rupees.
More than 15 email IDs were found logged into the arrested accused’s mobile phone. These accounts were allegedly used for firm registrations, fake billing and receiving OTPs for bank transactions, indicating a sophisticated and tech-enabled setup.
Several firms registered at addresses in Lucknow’s Indira Nagar—such as Aradhya Enterprises, SM Traders, Rathod Enterprises and Gaud Trading—were also found to be created using forged documents. These entities existed solely for generating fake transaction records.
Probe continues, more arrests likely
Preliminary estimates suggest that the GST evasion exceeds ₹100 crore, though officials believe the figure may rise as the investigation progresses. Efforts are underway to track down other members of the syndicate, with raids being conducted across multiple states.
Experts note that despite increased digital transparency in the GST system, such frauds continue to exploit loopholes through forged documentation and coordinated networks. The case highlights how economic offences are becoming increasingly complex, leveraging technology and inter-state linkages.
The bust once again underlines the need for tighter monitoring and enforcement mechanisms to curb large-scale tax evasion and safeguard public revenue.
