Bareilly: Uttar Pradesh Police have arrested two men in connection with an alleged Goods and Services Tax (GST) fraud exceeding ₹5 crore, in which investigators claim fake firms and bank accounts were used to generate fraudulent invoices and unlawfully claim Input Tax Credit (ITC). The accused have been sent to judicial custody following a joint operation based on three criminal cases registered at the Cantt, Izzatnagar and Bhamora police stations. Investigators are now examining the wider financial network, additional shell companies and the possible involvement of other suspects.
According to police, the investigation stems from GST fraud cases registered during 2024 and 2025. Acting on intelligence gathered during the probe, a special police team arrested Rahul Gupta, a resident of Bahjoi in Sambhal district, and Govind Gupta, a resident of Mirganj in Bareilly district, near the Nayara petrol pump at the Manu International School intersection. Police said both men had been wanted in all three cases and are being questioned regarding their alleged role in the fraud.
Investigators allege that the accused created multiple fictitious business entities and opened bank accounts in their names to facilitate the scheme. These entities were allegedly used to generate fake purchase and sale transactions, prepare fabricated invoices and vouchers, and fraudulently claim Input Tax Credit under the GST regime. Authorities believe the operation was intended to cause a loss of more than ₹5 crore to the government exchequer. Officials are now verifying GST returns, banking records and financial documents to establish the complete extent of the alleged fraud.
During interrogation, police reportedly identified two additional individuals—Amit Gupta and Prashant Gupta—whose alleged roles are now under investigation. Authorities are examining whether they were involved in operating other suspected shell companies or assisting in the creation of fraudulent business entities. Further legal action will depend on the evidence collected during the ongoing investigation.
The police also recovered a large quantity of documents and electronic evidence during the operation. Seized items include a Renault Duster SUV, nine mobile phones, 37 ATM and debit cards, 12 Permanent Account Number (PAN) cards, 21 Aadhaar cards and other identity documents, 36 cheque books, 17 bank passbooks, five signed blank cheques, six seals of suspected fake firms, eight UPI QR code scanners, two registers, three diaries, two filled bill books, 20 blank bill books, and GST- and banking-related documents linked to various firms. Investigators believe these materials could provide crucial evidence regarding the operation and financial transactions of the alleged network.
Police are now conducting forensic analysis of the seized mobile phones, digital payment records, banking transactions and data available on the GST portal. Investigators are also tracing the movement of funds through various bank accounts to identify the ultimate beneficiaries and determine whether the suspected fraud extended beyond Uttar Pradesh or involved individuals operating in other states. Authorities said financial trail analysis remains a key component of the investigation.
Officials noted that GST fraud involving shell companies, fictitious transactions and fraudulent ITC claims constitutes a serious economic offence that can significantly impact government revenue. They said the investigation remains underway and that further legal action will be taken based on documentary, financial and digital evidence. If additional individuals, companies or facilitators are found to have played a role in the alleged fraud, they too will face action in accordance with the law.
