In a major crackdown, police in Sitapur have busted an inter-state GST fraud racket and arrested four alleged masterminds involved in large-scale tax evasion. The accused reportedly lured unemployed youths with promises of jobs, collected their educational and identity documents, and used them to create fake firms to siphon off crores of rupees in Goods and Services Tax (GST).
According to police officials, the gang registered over 1,200 fake GST firms across multiple states including Tamil Nadu, Karnataka, Punjab, Haryana, Delhi, and Uttar Pradesh. Through these shell entities, they allegedly showed fictitious purchase and sale transactions to fraudulently claim Input Tax Credit (ITC), causing substantial loss to the government exchequer.
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Large Seizure During Operation
Police recovered ₹2.30 lakh in cash, three laptops, several mobile phones, 24 SIM cards, six ATM cards, a PAN card, cheque books, passbooks, a valuable ring, and a four-wheeler from the accused. Additionally, 70 copies of GST registration certificates, two Aadhaar cards, six electricity bills, and three ownership detail documents were seized.
Modus Operandi Exposed
Superintendent of Police Ankur Agarwal stated that authorities had received inputs about individuals collecting documents from unemployed youths under the pretext of offering employment. These documents were then used to obtain GST registrations for fake firms. The accused allegedly generated bogus invoices and fabricated high-value transactions to wrongfully avail tax benefits and pocket the GST amounts.
A joint team of police and crime branch arrested the accused, identified as Sona alias Ashish from Saiyan police station area of Agra district, Kuldeep Singh from Samsabad area, Vivek Kumar from Shahganj area, and Suraj Rawat from Almora district of Uttarakhand.
Fake Firm Operated in Sitapur
During interrogation, the accused confessed to setting up a fake firm named ‘PS Traders’ in Sitapur, registered in the name of Pooja Singh. Through this firm, they allegedly carried out fraudulent billing and claimed GST benefits on fabricated transactions.
Well-Organized Network
Police said the gang operated in a systematic manner. They targeted job-seeking youths, used their documents to open bank accounts, and secured GST registrations. The accounts and firms were then controlled entirely by gang members, while the individuals whose documents were used often remained unaware of the fraudulent activities.
A case has been registered under relevant sections, and forensic examination of seized electronic devices and documents is underway. Authorities are coordinating with the GST department to trace transactions and identify additional fake firms operating in other states.
Officials stated that once the investigation is completed, the actual quantum of tax evasion and the full scale of the network will be revealed.
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.
