Lucknow – A major Goods and Services Tax (GST) fraud worth over ₹2.75 crore has been uncovered in Lucknow, where police exposed a network of shell companies allegedly created to generate and sell fraudulent Input Tax Credit (ITC).
The operation was carried out jointly by the Cyber Cell, Surveillance Unit, and local police from the Itaunja area. Investigators revealed that more than 15 fake firms were floated solely to fabricate transactions and claim bogus tax credits.
Four Arrested, Mastermind Absconding
Police have arrested four accused in connection with the case. However, the alleged mastermind, Ammar Ansari from Sitapur, remains at large. Officials said Ansari had previously been jailed in a GST-related fraud case and was allegedly responsible for managing fake GST registrations and generating fraudulent ITC.
The case was initiated following a complaint filed by a State Tax Department official regarding a firm named “Swaraj Traders.” Investigations revealed that the firm did not exist and was used to generate and pass on bogus ITC worth ₹52 lakh during the 2024–25 financial year.
Exploiting Financially Vulnerable Individuals
According to police, the accused targeted economically weaker individuals by offering them ₹10,000 to ₹20,000 in exchange for their personal documents. These included Aadhaar cards, PAN cards, bank account details, mobile numbers, and proof of address.
Using these documents, the accused allegedly secured GST registrations for non-existent businesses.
Fake Transactions and Commission-Based ITC Sales
Once registered, the shell companies reportedly filed fraudulent GST returns and created fabricated invoices and e-way bills. Fake transactions were shown in commodities such as aluminium scrap, ferrous waste, iron, steel, tubes, and pipes.
The bogus ITC generated through these transactions was then sold to other businesses at a commission of around 1 percent. Purchasing firms allegedly used the fake credits to reduce their actual tax liabilities.
Significant Revenue Loss
Authorities estimate that the fraudulent activities resulted in a tax loss exceeding ₹2.75 crore. Officials described the case as one of the most significant GST fraud crackdowns in recent months.
Further investigations are underway to trace additional beneficiaries and apprehend the absconding accused.
