A massive nationwide racket involving fake Goods and Services Tax (GST) registrations has been unearthed, revealing how fraudsters used forged power bills, PAN and Aadhaar cards to set up bogus firms and siphon off government revenue worth crores.
Investigations have found that the syndicate operates across 23 states, creating an extensive web of fictitious entities. In Lucknow, several suspicious registrations were traced to a single firm’s address, where the supporting documents belonged to unrelated individuals. Preliminary findings suggest that nearly 80% of these firms were registered using forged or stolen documents, including electricity bills, PAN cards, Aadhaar cards and property papers.
According to tax officials, these shell firms were used to claim invoice-based Input Tax Credit (ITC) without any actual supply of goods or services. The modus operandi revolves around paper-only transactions — generating fake invoices to show large-scale business activity — enabling the fraudsters to illegally claim huge tax credits, causing heavy losses to the exchequer.
How the Fake Registration Network Operates
The scheme typically begins with the theft or misuse of scanned copies of identity and utility documents. These are then digitally altered using image-editing software to make minor changes in name, address or photograph, creating what appear to be legitimate papers.
Using these forged documents, the fraudsters obtain new GST registrations with fake or temporary contact details.
Once approved, they create a fake billing chain, where one bogus firm invoices another — generating crores of rupees in fake transactions. In reality, no goods or services are exchanged, but Input Tax Credit is fraudulently claimed, leading to large-scale revenue leakage.
Stricter Vigilance and Digital Verification
The State Tax Department has now made digital verification and physical inspection mandatory across all districts.
The GSTN portal is introducing enhanced safeguards like facial authentication and live location tagging to prevent misuse of personal data.
Officials say the issue has moved beyond conventional tax evasion, evolving into a data security and cybercrime concern. The misuse of personal identification documents, they warn, poses a serious threat to both fiscal integrity and digital trust in India’s tax ecosystem.
Expert View
Cybercrime expert and former IPS officer Professor Triveni Singh said the fake GST registration racket reflects how financial crime is rapidly merging with cyber-enabled fraud.
“This is no longer just about tax evasion — it’s a digitally driven financial crime,” Professor Singh said. “Fraudsters are exploiting weak verification protocols and using personal data obtained through leaks, phishing and dark web sources. Unless real-time validation between Aadhaar, PAN and GSTN systems is implemented, such fraudulent networks will continue to grow.”
He added that greater inter-agency collaboration is vital:
“Financial frauds today are powered by technology. Tax departments, cyber police and digital regulators must share intelligence and deploy AI-based monitoring tools to detect fake registrations and suspicious billing patterns early.”
Source from: https://the420.in/fake-gst-registration-racket-23-states-multi-crore-scam/
