Saharanpur: A major tax fraud involving more than ₹50 crore in Input Tax Credit (ITC) has come to light in western Uttar Pradesh, triggering alarm across the business community and tax administration. Preliminary findings suggest that the scam was being run in an organized manner for a long time, involving a web of fake firms and traders across several districts.
So far, over 100 traders have come under the scanner, with more than 40 firms linked to the Saharanpur zone alone. The layers of fraud are being uncovered through a joint investigation by the cyber police unit and the state tax department. Officials indicate that the scale of the scam could widen further as the probe progresses.
How Fake Transactions Enabled Real Gains
Investigations reveal that the accused created fictitious companies and showed fake purchase and sale of goods on paper to fraudulently claim ITC benefits. In reality, no actual transactions took place. Through fabricated billing and documentation, large amounts of tax credit were availed, resulting in significant losses to the government exchequer.
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Identity Theft at the Core of the Racket
One of the most startling aspects of the case is the misuse of identity documents. Authorities found that several fake firms were registered using Aadhaar, PAN, and addresses of individuals who were completely unaware of their involvement. These credentials were exploited to build a network of shell entities that appeared legitimate within the tax system.
Multi-District Spread and Expanding Probe
Officials say the network is not limited to Saharanpur but extends to multiple districts including Meerut, Muzaffarnagar, Shamli, and nearby regions. The role of traders from these districts is also under scrutiny. Investigators suspect the involvement of an organized syndicate operating across locations to exploit loopholes in the tax framework.
The cyber police are examining digital transactions, bank accounts, and suspicious financial trails linked to the firms. Meanwhile, the state tax department is verifying company registrations, return filings, billing patterns, and invoice matching. In several instances, multiple firms were found registered at a single address, deepening suspicion.
Systemic Concerns and Enforcement Challenges
Sources indicate that the modus operandi involved showing large-scale trade transactions on paper, followed by claiming ITC without actual tax payment. This allowed the accused to generate illegitimate credit, directly impacting government revenue.
Agencies have signaled that more major revelations are likely in the coming days. Preparations are underway for strict action against the entities and individuals involved. The identification of accused is being carried out through document analysis and digital evidence.
