A GST evasion racket involving alleged fake firms, bogus billing and fraudulent Input Tax Credit claims has been exposed in Moradabad, with two accused from Meerut arrested after investigators found that a scrap trading firm existed only on paper. Officials said the case involved a declared GST liability of ₹63,94,310, but no tax amount was deposited.
The arrested accused have been identified as Md. Faizal and Shahnavaz, both from Meerut. According to officials, they were allegedly involved in generating bogus invoices through a firm named National Traders, which was shown as engaged in scrap trading during the financial years 2022–2023.
Fake Firm Shown as Scrap Trading Business
Officials said National Traders reported a turnover of around ₹4.10 crore during the financial years 2022–2023. On the basis of these records, GST liability of ₹63,94,310 was declared, but the amount was not paid to the authorities.
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Further scrutiny found that no actual business activity was being conducted at the registered address of the firm. Investigators concluded that the entity was allegedly created only on paper to facilitate tax fraud.
The State Tax Department had also imposed a penalty of ₹56.06 lakh, which remains unpaid. Officials said the findings indicated that the firm was used as part of a wider fake billing arrangement.
Bogus Invoices Used to Claim ITC
The case was taken up after a complaint was lodged by the Assistant Commissioner of the State Tax Department at Majhola police station on April 11, 2026. Investigators then used technical surveillance, mobile number tracking and bank account analysis to trace the network.
Md. Faizal and Shahnavaz were arrested during the investigation. During interrogation, both accused reportedly admitted to generating fake invoices without any actual supply of goods.
Officials said the bogus invoices were allegedly used to fraudulently claim Input Tax Credit, which was later converted into monetary gains through illegal channels. The accused were produced before court and sent to judicial custody.
Mastermind Suspected, Wider Network Under Probe
The investigation has also pointed to the alleged role of Ishaan Malik from Meerut, who is suspected to be a key mastermind behind a wider network. Officials believe the network may have links across multiple regions, including Delhi.
Investigators said the syndicate allegedly involved several individuals handling different roles, including firm creation, invoice generation, banking transactions and fund circulation. Authorities are now examining related financial records and banking transactions to identify the full scale of the network and its beneficiaries.
Searches are underway to trace Ishaan Malik and other members linked to the racket. Officials said the investigation is continuing as part of a broader crackdown on organised GST frauds and fake billing networks.
