Three men, including two Class VIII dropouts, have been arrested for allegedly creating a fake firm using forged documents, showing crores of rupees in paper transactions and evading ₹37 lakh in Goods and Services Tax (GST). The accused lured labourers and economically vulnerable individuals with small cash payments to obtain their Aadhaar and PAN details, which were then used to open bank accounts, procure SIM cards and register shell companies.
Accused and Their Network
The arrested have been identified as Deepak Kumar of Salempur Pataura on Mohan Road, Prashant Tiwari of Badarkheda and Kailash from the Sandila area of Hardoi district. During interrogation, Deepak and Prashant told investigators they had studied only up to Class VIII but had built a network exploiting forged tenancy papers and utility bills to obtain GST registrations.
Investigators said the accused paid ₹10,000–₹15,000 to labourers to access their identity documents. Using these, they activated mobile numbers, opened bank accounts and prepared fake rent agreements and electricity bills to show a legitimate business address.
Operations of Bogus Firm ‘KS Inter’
A bogus firm named ‘KS Inter’ was registered on this basis, with an address listed at Tej House in Lucknow, though no actual business operated there.
Through this shell entity, the trio allegedly generated fake invoices showing crores in turnover and claimed input tax credit without any real supply of goods. The firm functioned solely as a billing front to manipulate GST filings and withdraw funds, causing a loss of ₹37 lakh to the exchequer.
Probe and Future Actions
Preliminary findings suggest the group was planning to register more such firms. Financial transactions in linked bank accounts and call detail records of the SIM cards are being analysed to determine whether the accused were part of a larger fake invoicing network.
Officials said the GST registration process was misused by submitting forged tenancy documents, electricity bills and identity proofs to establish a paper address. Once registered, the accused uploaded fabricated purchase and sale invoices on the GST portal, availed fraudulent tax credit and siphoned off the money.
Authorities are now identifying individuals whose documents were used. Notices will be issued to record their statements to ascertain whether they were merely induced to share documents or had knowledge of the fraud.
Experts note that creating shell firms to claim fraudulent input tax credit has become a common modus operandi in GST evasion cases. Using the identities of economically weaker persons to open bank accounts and then abandoning them makes the money trail harder to trace.
Further arrests are likely as investigators examine bank flows, GST returns and mobile location data to map the wider network. Officials believe the actual tax evasion figure could rise as more linked entities come under scrutiny.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
