The Uttar Pradesh Police's Special Task Force (STF) has dismantled a massive multi-state GST evasion racket by arresting five individuals from Barmer district, Rajasthan. The accused were allegedly running a fraudulent network involving over 100 shell companies registered across Delhi, Rajasthan, Uttar Pradesh and other states - with actual operations routed through Karnataka.
The racket came to light following a probe into a firm named AK Traders, allegedly involved in a Rs 248 crore tax fraud discovered in Muzaffarnagar last September. Shockingly, the firm was registered under the name of Ashwani Kumar, an unemployed man from Barsu village, who revealed he had unknowingly shared his PAN and Aadhaar details over a phone call while applying for a fake job, even paying a Rs 1,760 registration fee.
According to STF officers, the fraudsters used stolen identities like Kumar's to create dummy firms on the GST portal. These shell entities issued bogus invoices and e-way bills to actual businesses, helping them evade crores in GST. The syndicate allegedly charged Rs 3,000 per fraudulent bill and operated each fake firm only for a few days before shutting them down to avoid scrutiny.
"The group operated a sophisticated network of companies layered across multiple states to obscure the money trail. No GST was ever deposited with the government, and the firms were closed shortly after issuing invoices," said Brijesh Kumar Singh, Additional Superintendent of Police, UP STF.
The five arrested - Ratna Ram, Om Prakash, Hanuman Ram, Budhram, and Santosh Kumar - all residents of Barmer, were found to be working under the direction of masterminds Labhuram and Suresh, also from Barmer. The duo is accused of orchestrating the scam and directing operations from Bengaluru, where the arrested individuals had relocated two years ago.
Investigations reveal that the fake bills were funnelled through multiple fictitious firms and ultimately routed to legitimate businesses in South India to facilitate tax evasion. Companies would transfer funds to the accounts of the bogus firms, retain 10-20% as commission, and receive the remaining amount back in cash or through alternate accounts.
The STF is continuing its investigation to trace the full extent of the scam, identify all beneficiaries, and recover the defrauded GST. Authorities expect the total tax evasion to run into hundreds of crores, making it one of the largest GST-related frauds uncovered in recent months.
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