Lucknow | The Uttar Pradesh Special Task Force (STF) has uncovered a large and organised GST evasion racket, arresting four accused who allegedly operated a web of bogus firms across multiple States and several districts of Uttar Pradesh to siphon off tax revenue through fake invoices and forged e-way bills. Investigating agencies estimate that the fraud caused revenue losses exceeding ₹100 crore to the exchequer.
The arrested accused have been identified as Hardeep Singh, Jitendra Jha, Punit Agrawal and Shivam. STF officials said the arrests were made during questioning at the STF office in Noida, following sustained surveillance and intelligence-led inputs. According to officers, the syndicate had been operating in a highly planned and systematic manner, exploiting loopholes in the GST framework.
Illegal ITC trading via shell firms
Preliminary investigation reveals that the accused first registered shell companies existing only on paper, using fabricated addresses and forged documents to obtain GST registrations. These firms did not conduct any genuine movement of goods.
Instead, the accused allegedly generated fake invoices and e-way bills without any actual supply, creating the illusion of legitimate transactions. The fake invoices were then used to sell Input Tax Credit (ITC) to genuine operating firms, enabling them to illegally offset their GST liabilities.
Investigators said the beneficiary firms used the fake ITC to evade more than ₹30 crore in GST, directly contributing to the overall revenue loss suffered by the government.
Multi-State footprint of the racket
STF officials confirmed that the racket was not confined to Uttar Pradesh. The accused registered firms in multiple States using fake premises, rented locations and proxy individuals. Bank accounts linked to these firms were also opened using false or benami identities, allowing smooth circulation of funds while evading detection.
“This is a classic case of white-collar organised crime, where digital platforms and tax systems were manipulated with precision,” a senior STF officer said, adding that the network showed clear signs of professional planning and financial expertise.
Digital evidence and cash seized
During the arrests, STF teams recovered two laptops, several mobile phones, multiple Aadhaar cards and over ₹55,000 in cash from the possession of the accused. Officials believe the seized electronic devices contain critical digital evidence, including details of shell companies, invoice-generation software, e-way bill data and banking transactions.
All electronic devices have been sent for forensic examination, which investigators expect will help identify additional beneficiaries, facilitators and front entities linked to the fraud.
Impact on the GST framework
Tax experts say such rackets pose a serious threat to the integrity and credibility of the GST system. Fake ITC claims not only drain government revenue but also distort market competition, placing honest businesses at a disadvantage.
“Every rupee of fake credit ultimately shifts the tax burden onto compliant taxpayers,” an official familiar with the investigation said.
The STF indicated that more arrests are likely, as questioning of the accused has revealed the possible involvement of other intermediaries, accountants and firms.
Next steps in the probe
The STF has shared preliminary findings with the GST Department, and preparations are underway to produce the accused before court and seek custodial remand to further unravel the network.
Officials hinted that raids and searches may soon be carried out in other parts of the country, based on leads emerging from digital and financial trails.
Government agencies reiterated that the crackdown on GST evasion will continue and that any attempt to misuse the tax system through fake firms and forged documents will be dealt with strictly, irrespective of scale or geography.
