In a major crackdown on GST fraud, two men from Delhi have been arrested for allegedly evading GST amounting to nearly Rs 25 crore by floating dozens of fake firms, police officials said on Saturday.
The arrests were made following an FIR lodged around two months ago by GST authorities at the Sadar police station in Mainpuri, Uttar Pradesh. The complaint pertained to two suspicious firms involved in large-scale tax evasion. Owing to the technical and digital nature of the offence, the investigation was subsequently transferred to the cyber police station.
During the probe, police identified the accused as Chandan Mishra (32) and Sanjeet Singh (33), both residents of Swaroop Nagar in Delhi. The duo was arrested on Friday. According to police, Mishra has a prior criminal record and had earlier served jail time.
Superintendent of Police, Mainpuri, Ganesh Prasad Saha, said that four mobile phones, one laptop and documents related to 12 GST-registered firms were recovered from the accused. A case has been registered under multiple provisions, including Section 318(4) of the Bharatiya Nyaya Sanhita (BNS) for cheating.
Police investigations revealed that the accused allegedly obtained GST registrations for shell firms and carried out tax evasion running into crores of rupees. Their modus operandi involved targeting poor and unsuspecting individuals by offering them small amounts of money under the guise of employment. The accused would collect their Aadhaar and PAN details, open bank accounts in their names, and register GST firms without their knowledge.
Using these fake entities, the accused generated bogus GST invoices and e-way bills to illegally claim Input Tax Credit (ITC). Police said Mishra was primarily responsible for handling accounting and GST-related work, while Sanjeet arranged locations and logistical support for the firms. During interrogation, the accused allegedly admitted to creating fake GST invoices and e-way bills for around 150 firms.
"GST officials submitted an application stating that, on a large scale, fake companies were registered using fraudulent GST numbers with the objective of evading tax liability," SP Saha said.
He added that further investigation is underway to trace the wider network involved in the racket. "Strict action will be taken against anyone else found to be involved in this organised GST fraud," the SP said.
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