Police have busted a major fake GST billing racket involving large-scale loss to government revenue, arresting Jaspreet Singh alias Jassa from Punjab in connection with an alleged ₹54 crore input tax credit (ITC) fraud. The accused was apprehended from Fatehgarh Sahib district after remaining absconding for several months. A ₹25,000 reward had been announced on his arrest.
The case came to light last year after a complaint was filed by a state tax officer against a Varanasi-based firm, triggering a deeper probe that eventually revealed an organised inter-state network of fake firms and fraudulent GST filings, with operational links extending to Punjab.
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Modus operandi of the fraud
According to investigators, Jaspreet Singh created and operated multiple shell firms that existed only on paper. These entities were used to generate fake invoices and GST returns on the Goods and Services Tax portal without any actual movement of goods.
On records, the accused showed sales of iron, scrap and other raw materials to registered companies. In reality, police said, no physical supply ever took place. The sole purpose of these transactions was to enable beneficiary firms to wrongfully claim input tax credit, causing substantial loss to the exchequer.
Investigators said the accused systematically uploaded fabricated invoices, matched them with falsified returns and rotated transactions across multiple firms to avoid immediate detection.
Varanasi firm triggered the investigation
The FIR was registered in July 2025 on the complaint of an officer from the State Tax Department’s Varanasi unit. The case pertained to AS Works, a firm located in the Nadesar area of the city, owned by Abuzar Ahmed.
Data available on the GST portal showed that the firm filed a nil GSTR for April 2025. Crucially, records indicated that the firm had not received any inward supply (purchases) during March, April or May 2025.
Despite this, the firm reported massive outward supplies. According to transaction data, outward supplies worth ₹1.48 crore in March, ₹7.26 crore in April, and ₹45.48 crore in May were shown as sold to 10 firms located outside Uttar Pradesh.
This clear mismatch between inward and outward supplies raised red flags and prompted authorities to suspect a fake billing operation, eventually leading investigators to Jaspreet Singh.
Arrest from Punjab, key seizures
Using technical surveillance and digital tracking, police traced the accused to Fatehgarh Sahib district in Punjab and carried out the arrest. During searches, officers recovered a laptop, a tablet, multiple mobile phones, along with documents linked to fake firms, identity papers and banking records.
Police said the seized electronic devices are expected to provide critical leads about the scale of the network, transaction routing and the identities of other participants involved in the fraud.
Wider network under scanner
Investigators believe the arrested accused was a key operator in a much larger GST fraud syndicate. Authorities are now examining:
- How many shell firms were floated
- Which companies benefited from fake ITC claims
- Whether similar fraudulent transactions were routed through other states
Officials said the actual fraud amount could be higher than the initial ₹54 crore estimate, as scrutiny of linked firms and historical filings is still underway.
The accused has been produced before the court and remanded for further questioning. Police said more arrests are likely as the investigation progresses.
Economic offence specialists noted that fake GST invoicing and ITC frauds have emerged as one of the fastest-growing white-collar crimes in India, often involving complex inter-state networks, digital manipulation and shell entities.
Authorities said coordinated action between police and tax departments will be critical in dismantling such rackets and recovering lost revenue.
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.
