In a major action against organised tax evasion, UP STF along with Meerut Police have arrested three accused linked to two separate syndicates involved in large-scale GST fraud through fake firms. Investigations reveal that the network had been operating across different parts of the country for several years, causing substantial losses to the exchequer by using fake billing and fraudulent input tax credit. Fake documents, seven forged seals and four mobile phones have been recovered from the arrested accused.
According to police officials, one syndicate was active across Rajasthan, Delhi and other states, while the second network was operating in western Uttar Pradesh using shell companies to evade GST. The STF arrested one key member of the first group, who allegedly arranged bank accounts for the syndicate. He is accused of charging a fixed monthly fee for each account provided. Earlier, five members of the same gang had been arrested by the STF team from Bengaluru and sent to jail.
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Network active for six years
The investigation has revealed that the organised gang had been active for nearly six years. Members of the syndicate targeted individuals by luring them with promises of jobs or easy money. Aadhaar cards, PAN cards, electricity bills and other personal documents were collected from them. Using these documents, fake firms were registered. Bank accounts were then opened in the names of these firms, and mobile SIM cards were also procured, making the entire operation appear legitimate on paper.
From these shell companies, large volumes of invoices were generated without any real business transactions. Based on these fake invoices, input tax credit was claimed and GST amounts were siphoned off. Investigating agencies have confirmed that more than 100 fake firms were created and GST worth several crores of rupees was evaded through this mechanism.
Rented bank accounts at the core of the fraud
Police said that renting bank accounts was a crucial part of the operation. Several individuals were tempted with a fixed monthly payment to open accounts in their names. These accounts were then used for fake GST transactions, fund transfers and hawala-related activities. Investigators believe that this method helped conceal the actual chain of transactions and made it extremely difficult to trace the source of the money.
Two more accused arrested in a separate case
In a related case, the investigation was being carried out by the Meerut Crime Branch. During a joint operation with the SWAT team, two additional accused were arrested. Fake documents, forged seals and mobile phones were seized from them. Police are questioning the accused to determine the extent of their involvement and how closely they were linked to the already exposed network.
Case surfaced after GST and income tax notices
The entire scam came to light when fake firms were created in the name of an individual without his knowledge and invoices worth hundreds of crores were shown on paper. The fraud was discovered after notices were issued by the GST Department and the Income Tax Department. Following a formal complaint, the case was handed over to the STF and local police, leading to the gradual unravelling of the network.
Cases registered across the country
Police officials said that cases against the syndicate have been registered not only in Uttar Pradesh but also in Delhi, Rajasthan and other states. Teams have been dispatched to multiple locations to trace and arrest absconding accused. Forensic examination of the seized documents and digital data is underway to identify the full extent of the network and determine the actual number of fake firms involved.
More arrests likely
Investigating agencies have indicated that more arrests are likely in the coming days. Police officials said the campaign against fake firms, GST evasion and misuse of bank accounts will continue. The action is being seen as a strong warning to organised gangs that use forged documents and fictitious transactions to defraud the government and cause massive losses to public revenue.
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.
