A major alleged Goods and Services Tax (GST) fraud has been uncovered in Bareilly, Uttar Pradesh, where a fake firm was allegedly registered in the name of a labourer to facilitate bogus input tax credit (ITC) worth approximately ₹3.06 crore. An investigation by the state tax department revealed that the firm, registered as ‘Jageshwar Traders’, had no actual business establishment at its declared address.
The Special Investigation Team (SIT) arrested Aman Kashyap in connection with the case and sent him to jail on Friday. The investigation has also brought to light the alleged involvement of a network that used the identity documents of labourers to establish fictitious business entities. The alleged mastermind, Prashant Gupta, and several other suspects remain under investigation, with some accused still absconding.
How Was the Fake GST Firm Exposed?
An FIR concerning the alleged GST fraud was registered at Izzatnagar police station following a complaint by the Deputy Commissioner of the State Tax Department, Sector-08, Bareilly.
During the investigation, officials found that a firm named ‘Jageshwar Traders’ had been registered in the name of Aman Kashyap, a resident of Biharipur Civil Lines, Bareilly. The firm was allegedly used to facilitate bogus input tax credit amounting to approximately ₹3.06 crore.
The registered address of the firm was listed as Mauly Market, Chhoti Bihar, along the Pilibhit Bypass in Bareilly. However, when officials from the state tax department conducted a physical inspection of the location, they could not find any shop or commercial establishment operating under the name ‘Jageshwar Traders’.
The discovery raised suspicions about the transactions recorded through the firm and the individuals associated with its registration and operations.
Acting on the findings, the SIT, which is investigating the case, arrested Aman Kashyap from his residence on Thursday night. He was sent to jail on Friday.
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How Did a Labourer Become a Firm Owner?
During questioning, Aman reportedly told investigators that he was friends with Sachin Kumar and Arun Kumar, who lived in his neighbourhood. Several years ago, the three worked as temporary labourers, selling tickets for amusement rides at a fair organised at Bishop Mandal Inter College.
According to Aman’s statement, Sachin met Prashant Gupta, a resident of Math Laxmipur, during the fair. Prashant allegedly offered Sachin the opportunity to earn substantial money by setting up fake firms and showing fictitious business transactions on paper.
Sachin subsequently brought Aman and Arun into the arrangement. They were reportedly told that firms would be registered in their names and used to show business activities in exchange for financial benefits.
Who Collected Their Identity Documents?
Aman further stated that Prashant took the three men to ‘Paras Traders’, located near the Mini Bypass. Prashant’s brother, Paras, and their father, Subhash Gupta, were allegedly present there.
The three men were asked to provide their Aadhaar cards, PAN cards and photographs under the pretext of registering business firms. Investigators suspect that these documents were subsequently used to register fictitious entities and create records of transactions that did not reflect genuine business activity.
Aman and Arun were allegedly promised ₹55,000 each in exchange for their participation. Aman told investigators that Prashant initially made some cash payments but later stopped responding when Aman demanded more money than the amount originally agreed upon.
How Did an Income Tax Notice Expose the Network?
According to Aman’s statement, Prashant stopped answering his phone after Aman sought additional payment. Around the same time, Arun received a notice from the Income Tax Department, following which members of the alleged network began going into hiding.
Investigators suspect that identity documents were used to establish fictitious business entities and obtain tax benefits through transactions recorded on paper. The investigation is examining the nature of these transactions and the extent of the alleged fraud.
Who Is Absconding?
The SIT has reportedly identified the alleged roles of Prashant Gupta, his brother Paras, their father Subhash Gupta, Sachin Kumar and Arun Kumar.
According to the investigation, Prashant had previously been jailed and is wanted in two other cases. His father, Subhash Gupta, is already in jail, while Prashant and his brother Paras remain absconding.
The SIT is continuing its search for Prashant, Paras, Sachin and Arun. Investigators are also examining which businesses may have benefited from the alleged ₹3.06 crore in bogus input tax credits and whether additional individuals or firms were involved in the suspected network.
The full extent of the alleged fraud, the roles of the individuals involved and the final findings regarding the transactions will become clearer as the investigation progresses.
The alleged ₹3.06 crore GST fraud highlights how Aadhaar cards, PAN cards and photographs can be used to register business entities that exist only on paper. The absence of a shop at the declared address raises questions about the firm’s transactions and registration. The investigation will need to establish who controlled the alleged fake firms, who benefited from the tax credits and the precise roles of those involved.
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