A massive GST evasion syndicate, spanning multiple states and causing at least ₹250 crore in losses, was dismantled earlier this week by the Uttar Pradesh Special Task Force (STF). Five suspects—allegedly operating out of Bengaluru and Rajasthan—have been arrested for orchestrating a complex shell‑company network that exploited the identity of a jobless Meerut man to defraud tax authorities.
Stolen Identity, Shell Firms, and E‑way Bill Scheme
STF officials say the racket began when a jobless resident of Barsu village, Muzaffarnagar district, was deceived into giving his Aadhaar and PAN details under the pretext of job applications. His credentials were then used to register over 100 shell companies across Delhi, Rajasthan, Uttar Pradesh, and Karnataka. One such entity, “AK Traders”, registered in Meerut last September, allegedly issued fraudulent e-way bills worth ₹248 crore in fake transactions involving scrap and marble goods.
The syndicate—run by masterminds Labhuram and Suresh, along with five accomplices from Barmer district (Ratna Ram, Om Prakash, Hanuman Ram, Budhram and Santosh Kumar)—relocated to Bengaluru two years ago. There, they operated from Karnataka but continued to register shell firms and issue e-way bills for non-existent trades.
Mechanics of the Fraud Ring
According to ASP Brijesh Kumar Singh, each of the five arrested individuals registered companies, issued fake invoices and e-way bills, and routinely shut them down to avoid scrutiny. They earned ₹3,000 per fake e-way bill. The dummy firms passed the fabricated bills through layers of shell entities before routing them to actual businesses, which used them to claim false Input Tax Credit and evade GST payments.
Funds moved from client companies to the bogus firms; the crooks retained 10–20%, returning the balance in cash or to mule accounts, and none of the collected GST was ever remitted to the government.
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Court Action and Wider Implications
The STF has lodged FIRs under the GST Act and related provisions. The arrested accused are undergoing judicial custody as the investigation expands to unearth the full chain, from the Bengaluru hub to other beneficiaries across southern states.
This case echoes a previous 2023 bust by the DGGI in Meerut, which dismantled shell‑firm networks passing ₹557 crore in fake ITC via 246 companies. Observers say this indicates a recurring pattern of abuse of GST provisions via layered fraud operating across state boundaries.
About the Author – Anirudh Mittal is a B.Sc. LL.B. (Hons.) student at National Forensic Sciences University, Gandhinagar, with a keen interest in corporate law and tech-driven legal change