UP Police’s Special Task Force (STF) arrested five men from Barmer district in Rajasthan on Thursday for allegedly running a multi-state GST evasion racket by using a jobless Muzaffarnagar man’s stolen identity to create over 100 shell firms registered in Delhi, Rajasthan, UP, etc., but operated in Karnataka.
The fake firms were used to issue fraudulent bills to real companies, helping them evade crores of rupees in taxes, the quantum of which is still being assessed.
The trail began on Sept 3 last year in Muzaffarnagar, when GST officials found a firm named AK Traders allegedly involved in a Rs 248 crore tax fraud. It was registered under Ashwani Kumar, a jobless man from Barsu village, who had no knowledge of the firm.
He told officials he had shared his PAN and Aadhaar numbers over a phone call after being told he was applying for a job. He had also paid Rs 1,760 as a registration fee.
The matter was handed to UP STF after an initial investigation. STF found that AK Traders, registered as scrap and marble traders, had issued e-way bills to seven shell firms. These firms passed on fake bills to over 100 fictitious companies in different layers, which then routed them to genuine businesses in several states of South India to help them avoid GST.
ASP (UP STF) Brijesh Kumar Singh said the five accused — Ratna Ram, Om Prakash, Hanuman Ram, Budhram, and Santosh Kumar — were residents of Barmer and knew Labhuram and Suresh, the two masterminds from the same region.
“They would lure job seekers, take their ID documents, use them to issue SIM cards and register companies on the GST portal,” Singh told TOI.
He said the five had shifted to Bengaluru two years ago and followed orders from Labhuram and Suresh to issue e-way bills.
“They got paid Rs 3,000 for each bill issued,” Singh added. The scam operated by shutting down each fake firm within days to dodge detection. “Since there were no actual purchases or sales, the firms avoided depositing any GST. The layering of firms was designed to confuse investigators and obscure the money trail,” Singh said.
Each company seeking a fake bill transferred money to the bank account of a bogus firm run by the masterminds. After deducting a 10–20% cut, the rest of the money was returned to the client in cash or into a different account they named.
Singh said, “None of the GST collected was ever deposited with the govt. The companies were closed soon after issuance of bills, leading to losses worth crores.”
Source #TOI
