The Uttar Pradesh Police on Saturday claimed to have unearthed a gang running an inter-state GST tax evasion racket that floated nearly 1,200 bogus firms across 20 states and sold them to traders and businessmen for the purpose of fraudulently claiming Input Tax Credit (ITC).
Four persons, including the kingpin of the gang, Ashish alias Sona of Agra, have been arrested from Sitapur district, officials said.
The other arrested accused are Kuldeep Singh and Vivek Kumar of Agra and Suraj Rawat of Almora district in Uttarakhand. Rs 2.30.lakh in cash, mobile phones, 70 GST registration certificates, several Aadhaar cards, electricity bill copies, diary pages, laptops, and ownership documents have been recovered from the accused, police said.
Kiran S, Inspector General (IG), Lucknow Range, said the racket was unearthed following an extensive investigation conducted by a team of officials from different police stations and the surveillance and SWAT teams of the Sitapur district police.
The fraud caused losses running into crores to the government exchequer in the past 15 years, he added.
The Sitapur police got a whiff of the scam after a case was registered in the district over a bogus firm being created in the name of a woman who was unaware of it, the IG said.
Circle Officer (Sitapur city) Vinayak Bhosale, who led the investigating team, told The Indian Express that Ashish and his girlfriend (who is absconding) became part of the GST evasion racket through an acquaintance named Mani while working at a company in Noida in 2020-2021.
Ashish and the woman later returned to their hometown Agra and began their own network to execute such frauds, he said, adding they would hire three to four staff members and then invite applications for jobs.
Then they created a website ‘workingindia.com’ and their staff used to collect documents like Aadhaar, PAN card, address proofs and educational documents, assuring the applicants of providing them jobs after interviewing them online, Bhosale added.
With these documents, the two key accused used to create bogus firms and get those registered with the GST authorities, the Circle Officer said.
Then Ashish and his girlfriend would approach traders through social media and online business platforms and ask them if they were interested in buying firms through which they could evade paying GST, he said.
They would sell a shell firm each at Rs 30,000 or a higher price, it was claimed.
The traders would show fake sales and purchase transactions through these firms to illegally claim GST input tax credit in states, including Tamil Nadu, Karnataka, Punjab, Haryana, Delhi and Uttar Pradesh, said Bhosale.
Ashish and his girlfriend had even opened bank accounts using fake ID documents and used them to get money transferred from traders for the sale of bogus firms, police said.
The accused reportedly used multiple laptops, mobile phones, and SIM cards to manage registrations and transactions, while traveling across districts to expand their network, the CO said.
The firm created in the name of the Sitapur woman by using her documents was used to siphon off Rs 5.88 crore using fraudulent GST filings, police claimed.
Bhosale said they have informed the GST authorities about the development.
DGP Rajeev Krishna had recently formed a Special Investigation Team (SIT) headed by the Economic Offences Wing (EOW) IG to probe cases involving GST fraud and evasion.
