Police have unearthed a GST fraud racket that created a web of shell firms using forged documents to siphon off input tax credit, causing a loss of about ₹2.75 crore to the exchequer. Four accused, including a woman alleged to be running the operations, were arrested in a joint raid by the cyber police, crime cell and local police. The main kingpin remains absconding.
Investigators said the gang floated at least 16 bogus firms across multiple districts and generated fake invoices to claim fraudulent tax credits. The network allegedly exploited loopholes in the registration and physical verification process, with suspicion of collusion by certain insiders. Those under the scanner include officials who cleared verification reports without proper checks.
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The arrested have been identified as Tabassum, Prashant Benzwal, Daulat Ram and Sumit Saurabh. Police said Tabassum played a key operational role—arranging forged documents, getting dummy firms registered and coordinating transactions among the members.
Probe findings indicate that the accused showed fictitious purchases and sales on paper to build a trail of fake business activity. These paper transactions enabled them to avail input tax credit and rotate funds without actual movement of goods. In one specific case, a complaint over ₹52 lakh GST evasion led to deeper scrutiny, which eventually exposed the larger network.
According to police, fake invoices were issued in the name of firms linked to Sumit Saurabh, while another firm registered under Daulat Ram was used to route transactions. The gang members remained in constant contact and created circular trading patterns to make the entries appear genuine in GST returns.
The alleged mastermind, Ammar Ansari, is currently absconding and multiple teams have been deployed to track him down. Officials believe his arrest may reveal more shell entities and additional beneficiaries of the fraud. Electronic devices, financial records and bank account details have been seized and sent for forensic examination.
Investigators are also examining whether any officials knowingly approved registrations or filed misleading verification reports. Departmental action and criminal proceedings are likely if complicity is established.
Experts say fake invoice-based GST frauds typically rely on shell companies, dummy proprietors and fabricated addresses. Such rackets are detected by matching GST returns with e-way bills, banking trails and transaction patterns to identify circular trading.
Police said further arrests are likely as the probe expands and urged traders to report suspicious billing or invoice activity promptly to prevent revenue leakage.
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.
