Moradabad: The Uttar Pradesh Economic Offences Wing (EOW) has arrested two Delhi-based men for allegedly orchestrating a ₹4.17 crore Goods and Services Tax (GST) input tax credit (ITC) fraud through a fictitious business entity. According to investigators, the accused registered a fake GST firm with no legitimate commercial activity and used it to issue fraudulent tax invoices, enabling buyers to claim ineligible ITC and causing significant revenue loss to the GST Department.
The arrested accused have been identified as Pawan Raghav, a resident of Uttam Nagar, Delhi, and Mohit Kumar, a resident of Sagarpur in South West Delhi. Both were arrested on July 21 during a special drive conducted by the EOW’s Meerut Sector against wanted economic offenders.
The arrests were made in connection with Case No. 53/24, which stems from FIR No. 51/2024 registered at Mughalpura Police Station in Moradabad. During the investigation, officials found that the accused had fraudulently obtained GST registration for M/s Raghav Enterprises, despite the firm having no genuine business operations or actual supply of goods.
Investigators alleged that the fake firm was used to generate and pass on fraudulent input tax credit worth approximately ₹4.17 crore to multiple buyers. The operation allegedly relied on forged documents, fabricated business credentials and fictitious transactions to create bogus GST invoices without any underlying supply of goods or services.
The preliminary investigation further revealed that Pawan Raghav allegedly shared his Aadhaar card, PAN card and Aadhaar authentication OTP with Mohit Kumar, enabling the fraudulent GST registration. The registration was subsequently used to generate fake tax invoices and facilitate the fraudulent transfer of ITC.
According to the EOW, such fake GST networks typically operate by creating paper transactions to generate illegitimate tax credits, allowing beneficiaries to reduce their tax liability while inflicting substantial losses on government revenue.
Investigators are now examining the role of other individuals and potential beneficiaries linked to the network. Authorities are tracing the recipients of the fraudulent invoices and analysing financial transactions, bank accounts and digital records to identify everyone involved in the alleged fraud.
Officials said that further legal action would be initiated if additional individuals or entities are found to have participated in or benefited from the scheme. Investigators are also scrutinising GST portal records and other documentary evidence to establish the full extent of the alleged racket.
Experts note that fake GST registrations and fraudulent ITC claims have become one of the most common methods of tax evasion in recent years. They say timely digital verification, financial analysis and coordinated enforcement are essential to detecting such organised tax frauds. The EOW has stated that its special campaign against economic offences and GST-related fraud will continue across the state, with strict legal action against those found involved.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
