A major Goods and Services Tax (GST) fraud case has come to light in Uttar Pradesh’s Agra, where state tax authorities have alleged that a businessman created a fictitious trading firm using forged documents and subsequently availed fraudulent Input Tax Credit (ITC), causing a revenue loss of more than ₹1.62 crore to the government. Following a complaint by the Commercial Tax Department, a criminal case has been registered and further investigation is underway.
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The Fictitious Setup of UB Enterprises
According to officials, the case revolves around a firm named UB Enterprises, which was allegedly registered on the basis of fabricated records, including a forged electricity bill purportedly issued by Torrent Power. Investigators claim the firm had no actual business operations, physical infrastructure, or genuine commercial transactions, yet it was used to generate and circulate invoices for tax benefits.
Department records indicate that the firm’s proprietor was identified as Umesh Kumar Vyas, who applied for GST registration in 2020. After completion of the registration process, the firm reportedly became operational under the GST system in 2022. During registration, the business address was shown as a location on Gwalior Road in Agra, and the firm declared that it would engage in the trading of copper scrap.
Suspicion arose after tax officials noticed unusual transaction patterns and discrepancies in the firm’s GST filings. The State Tax Department’s Special Investigation Branch (SIB) initiated a detailed probe to verify the firm’s activities and tax claims. During the investigation, officials attempted to contact the firm using the mobile numbers provided in registration records, but all the numbers were found to be inactive.
Physical Verification and Forgery Detection
Investigators then conducted a physical verification of the registered address. According to the findings, no office, warehouse, business establishment, or operational activity linked to the firm could be located at the site. Officials concluded that the entity existed only on paper and lacked any genuine commercial presence.
The investigation took a more serious turn when authorities examined the electricity bill submitted as address proof during registration. The document was allegedly presented as a bill issued by Torrent Power. However, verification revealed that the service number mentioned on the bill was invalid and could not be authenticated through the utility provider’s records. Officials subsequently concluded that the document had been fabricated to obtain GST registration fraudulently.
Exploitation of Input Tax Credit
Further scrutiny of financial records allegedly revealed a network of bogus transactions designed to exploit the GST system. Investigators claim that the firm reported large inward supplies and generated purchase records without any actual movement or receipt of goods. Based on these alleged paper transactions, the firm claimed substantial Input Tax Credit under GST provisions.
Under GST regulations, Input Tax Credit can generally be claimed only when goods or services are genuinely supplied and statutory conditions are fulfilled. Authorities allege that in this case no actual supply of goods took place and that the invoices were merely used to create an artificial trail of transactions.
According to the department, the fraudulently obtained ITC was subsequently utilized to offset tax liabilities arising from outward supplies shown in returns, thereby reducing or eliminating the tax payable. Officials believe this mechanism enabled the accused to derive unlawful tax benefits while causing direct losses to the government exchequer.
Police Action and Broader Shell Networks
The State Tax Department has estimated that the alleged fraud resulted in a revenue loss of ₹1,62,35,492 during the 2021–22 financial year alone. Authorities are now examining whether similar methods were used in other tax periods or through additional entities connected to the accused.
Police have registered a First Information Report (FIR) at Lohamandi Police Station based on the department’s complaint. Investigators are collecting documentary, financial, and digital evidence to establish the full scope of the alleged fraud and identify any accomplices who may have been involved in creating or operating the fictitious firm.
Officials familiar with the probe have indicated that similar cases involving forged utility documents and fake GST registrations have surfaced in Agra in the past. As a result, investigators are examining whether the present case forms part of a larger network engaged in creating shell entities for fraudulent ITC claims.
The case highlights the continuing challenge faced by tax authorities in combating sophisticated GST fraud schemes that rely on forged documentation, non-existent firms, and fabricated invoices to exploit the tax system. Further legal action is expected as the investigation progresses.
