Bareilly: The Bareilly Crime Branch has arrested a Meerut-based man in connection with a large-scale Goods and Services Tax (GST) fraud involving the creation of bogus firms to illegally claim input tax credit and refunds amounting to over ₹20 crore. The arrest is part of an ongoing probe into an organised network that investigators say operated across multiple districts using fake registrations, forged documents and circular transactions.
Arrest After Weeks of Surveillance
The accused has been identified as Yogesh Sharma, a resident of Chhajupur village under the Paratapur police station limits in Meerut. Crime Branch officials said Sharma was arrested from a residential apartment complex in Ghaziabad following sustained surveillance. He was produced before a court and remanded to judicial custody.
Investigators said Sharma was a key operational member of a larger syndicate allegedly masterminded by Manish Agrawal, a resident of Bareilly, who remains absconding. Manish Agrawal’s wife Aparna Agrawal, along with Gaurav Agrawal and Aadi alias Yugansh Bisaria, are also suspected to be involved in running the fraudulent network. Gaurav Agrawal was arrested earlier in the case.
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An Organised Network of Bogus Firms
According to the Crime Branch, the group floated multiple shell entities using rented shop and house addresses to obtain GST registrations. One such firm, registered under the name Shyam Traders, was allegedly used to generate fake invoices and e-way bills without any actual movement of goods. These documents were then used to fraudulently pass on bogus input tax credit and claim GST refunds.
Officials said the fraudulent registrations were obtained with fabricated business details and minimal physical verification. Once registered, the firms issued invoices to each other in a closed loop, creating the appearance of legitimate trade while inflating tax credits. The refund amounts were then siphoned off through a network of bank accounts controlled by the accused and their associates.
Fake Transactions and Digital Trails
The case came to light after a state tax officer lodged a complaint at the Bithri Chainpur police station flagging suspicious GST refund claims and inconsistencies in e-way bill data. Following the complaint, the Crime Branch initiated a detailed probe, tracking digital footprints, bank transactions and mobile communication records.
Investigators said Sharma had been absconding since the registration of the case and was declared wanted. Acting on specific intelligence, a Crime Branch team led by Inspector Sanjay Dhir conducted a raid at a Ghaziabad apartment and arrested him on Thursday.
A mobile phone recovered from Sharma has been sent for forensic examination to analyse communication with other accused, transaction trails and possible links to additional shell firms. Officials said the digital evidence is expected to provide crucial leads on the scale of the fraud and identify other beneficiaries.
The Crime Branch has alleged that the network functioned as an organised crime syndicate, with defined roles for registration, documentation, banking operations and fund withdrawal. Preliminary evidence also suggests possible links with hawala operators, with investigators suspecting that some payments and settlements were routed through informal money channels to avoid detection.
Wider Probe and Possible Further Action
Officials said the accused frequently changed firm addresses and used vacant or rented premises to mislead authorities. Fake e-way bills were allegedly generated using empty vehicles or non-existent transport routes, further strengthening the illusion of genuine commercial activity.
The Crime Branch has begun the process of identifying and attaching properties acquired using proceeds of the alleged fraud. Given the organised nature of the crime and the magnitude of the financial loss to the exchequer, officials said provisions under stringent laws, including those related to organised crime and gang activity, could be invoked at a later stage.
Police said efforts are underway to arrest the remaining accused, including the alleged mastermind and his associates. Multiple bank accounts linked to the syndicate are under scrutiny, and further arrests are expected as the investigation progresses.
Officials reiterated that the crackdown is part of a broader drive against GST fraud networks exploiting the tax system through fake firms and document manipulation, warning that similar rackets operating in the region will face strict action.
