The state tax department has exposed a major input tax credit (ITC) fraud worth crores of rupees, involving GST registration obtained through fake documents. Officials say the scam is part of a wider network of bogus billing and tax evasion, highlighting growing abuse of India’s indirect tax system.
Fake GST Registration and Suspicious Documents
Deputy commissioner of state tax, Bhupendra Singh, lodged a complaint at Vikasnagar police station after investigators found that one firm had secured GST registration by furnishing non-existent addresses and forged paperwork.
The given address turned out to be false, and instead, a bakery was operating at the location. The lease deed and electricity bills submitted for registration were flagged as suspicious during verification.
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Bogus Supplies and Fake ITC Claims
The departmental probe revealed that between April and June 2025, the firm passed on fake ITC worth over ₹3 crore by showing non-existent supplies. Multiple firms were found to have availed ITC benefits without actual transactions, suggesting a well-organized conspiracy.
Investigators noted that the scheme relied on paper-based transactions and bogus billing, enabling firms to reduce their tax liabilities unlawfully. The fraud not only deprived the exchequer of legitimate revenue but also distorted fair competition in the market.
Legal Action and Wider Probe
On the basis of the complaint, the accused have been booked under Section 318(4) of the Bharatiya Nyaya Sanhita (BNS). The case has been assigned to sub-inspector Atul Yadav for further investigation.
Authorities are expected to trace the entire network of shell entities involved in the scam, with the possibility of uncovering larger fraudulent claims across multiple states. Tax officials have cautioned that this case is a reminder of how fake GST registrations and ITC misuse continue to challenge regulators despite tighter compliance measures.
The probe underscores the need for stringent checks on GST registration processes, digital verification of business premises, and closer monitoring of ITC claims to prevent future fraud.