A well-organised network involved in large-scale GST evasion through fake firms has been exposed in Uttar Pradesh’s Firozabad district. Following an extensive investigation by the Special Investigation Team (SIT), the police have arrested three accused in a Goods and Services Tax fraud amounting to ₹2.20 crore. The accused allegedly showed transactions worth several crores on paper without carrying out any real business activity, causing significant loss to the government exchequer.
According to the police, the accused systematically created forged documents and fabricated rent agreements to obtain GST registration. Fake invoices were then issued in the name of these firms to illegally claim Input Tax Credit (ITC). The investigation revealed that while large turnovers were reflected in official records, there was no actual purchase or sale of goods on the ground.
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Investigating agencies stated that all three arrested accused had been actively involved in such activities for a considerable period. Five mobile phones and several SIM cards used in the GST fraud were recovered from their possession. Digital data extracted from these devices revealed crucial details related to fake invoices, banking transactions and suspicious contacts. The material has been preserved for further technical and forensic examination.
The case originated from a complaint filed on October 15, 2025, alleging GST evasion through bogus firms. The complaint stated that GST registration was obtained in the name of a private company using forged documents and fake rent agreements. During verification, it was found that the rent agreement submitted for registration, dated February 2024, was entirely fabricated.
The SIT probe further revealed that during the financial year 2023–24, fake sales worth ₹8.32 crore were shown without any actual movement of goods. In the financial year 2024–25, additional sales of ₹7.58 lakh were also reflected only on paper. Cumulatively, these transactions resulted in a GST liability of ₹2.20 crore, which was deliberately evaded.
The investigation also found that to illegally avail ITC, the accused relied on fake billing, forged documents and fictitious transportation details. Such practices not only led to direct losses to government revenue but also created unfair competition for honest traders operating within the legal framework.
Police officials said that professional assistance was also taken to run the network. During the probe, the role of a chartered accountant was found to be suspicious. It is alleged that he used his technical expertise and computer resources to assist in GST registration, preparation of fake bills, vouchers and other documents for the bogus firm. Efforts are underway to trace him, and investigators believe his interrogation could lead to further disclosures.
The police stated that cases have been registered against the arrested accused under stringent provisions of the GST Act, and further legal action is in progress. Investigators are also examining the broader network to identify other individuals involved and traders who may have benefited from the fake firms to evade taxes.
According to investigating agencies, the case is unlikely to be limited to a single firm or a handful of individuals. Further investigation may uncover additional instances of GST evasion and a wider network of shell firms. The joint action by the police and the state tax department is being viewed as a significant and decisive blow against organised GST fraud in the region.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
