Lucknow: The GST department has registered a case at Bijnor police station against accused Dheeraj Sain for allegedly evading taxes worth crores by creating a fake firm and passing on fraudulent Input Tax Credit (ITC) of ₹5.45 crore. Officials said the accused carried out circular trading without any actual supply of goods, causing significant revenue loss to the government.
According to the complaint filed by the Assistant Commissioner (State Tax), the accused obtained GST registration for a firm at a fake address in Aurangabad Khalsa on Raebareli Road. A covert verification by the department found no business activity at the declared location, and the mobile numbers provided during registration were switched off.
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Crores shown on paper, no real trade
The investigation revealed that during the financial year 2025–26, the firm reported large transactions only on paper:
- ₹15.38 crore shown as fake inward supply to avail ₹2.76 crore ITC
- ₹30.28 crore shown as outward supply to pass on ₹5.45 crore ITC to other entities
This mechanism is part of circular trading, where no physical movement of goods takes place and tax credit is fraudulently generated through invoices.
Links to other bogus firms
The probe has also identified links with other suspicious entities, including Jha Enterprises and Himanshu Traders, whose GST registrations had already been cancelled or suspended due to irregularities. Authorities are now examining the wider network to trace the beneficiaries of the fraudulent ITC.
Police probe underway
Following registration of the FIR, police have begun an investigation to identify other individuals involved in the racket. Officials indicated that further action, including arrests and recovery proceedings, may follow.
Experts note a rising trend in fake invoicing and circular trading to claim ITC, prompting tax authorities to intensify enforcement through data analytics, risk profiling and on-ground verification to dismantle such networks.
