In a major breakthrough against tax evasion, Sadar Kotwali police arrested two individuals on Monday evening in connection with a massive Rs 10.76 crore Goods and Services Tax (GST) fraud involving fake companies and bogus invoices. The accused are said to be part of an organized money laundering syndicate operating across multiple cities in Uttar Pradesh.
The arrested men, Yogesh Garg alias Monu, a resident of Ghaziabad, and Sanjay Thakur from Lucknow, were intercepted while heading to meet a lawyer in connection with the case. They were wanted for orchestrating fraudulent GST claims using a shell entity named Sarvashri Rajdhani Enterprises, allegedly set up in Rae Bareli using forged documentation.
Bogus Firms, Fictitious Transactions and ITC Scam
Police revealed that the fake company was created by misusing identity documents and SIM cards linked to previously surrendered GST accounts. During interrogation, Yogesh confessed that his personal documents were used to incorporate the sham entity in exchange for a cut of the fake GST refunds. He further disclosed that he operated under the direction of Sanjay Thakur, who claimed allegiance to a larger racket headed by one Naresh Rana.
The syndicate's modus operandi included the generation of fake invoices for non-existent goods, enabling them to fraudulently claim input tax credits (ITC) at 18% GST rates. These ITCs were then passed on to multiple partner firms, facilitating fictitious transactions valued at Rs 57.35 crore and resulting in wrongful ITC claims of Rs 10.76 crore.
Aadhaar, Mobile Misused for Fraud
The case came to light after a complaint was filed by Ramesh Chandra, a resident of Satyanagar, who alleged that his Aadhaar number and mobile-linked to a GST registration he had surrendered two years ago-had been used without his knowledge to set up the fraudulent enterprise.
Wider Crackdown Expected
Authorities believe this is just the tip of the iceberg, with more arrests and raids likely in the coming days. Police have launched an investigation into the wider network, which appears to involve forged KYC documents, multiple fake firms, and layered financial transactions designed to evade the GST system.
Officials confirmed that charges under sections of the Indian Penal Code, GST Act, and Prevention of Money Laundering Act (PMLA) are likely to be imposed against the accused.
Conclusion
This case underscores the growing use of digital identities in tax fraud and highlights the need for stricter verification mechanisms in GST registrations. As the government tightens its grip on evaders, such coordinated efforts between the police and tax authorities are proving crucial in dismantling financial crime networks.
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