The Uttar Pradesh Special Investigation Team (SIT) has uncovered a Rs 400 crore GST evasion racket operating through 144 shell companies created using documents stolen from unemployed youth. Two men from Moradabad-identified as Mohd Ikhlaq of Meerut's Shastri Nagar and Ittefat Alam of Shahjahanpur, have been arrested in connection with the massive fraud, police said on Sunday.
According to SP (Crime) Subhash Chandra, the accused lured job seekers and loan applicants through online ads, collected their ID documents and used them to illegally register fake GST entities across multiple states. Police recovered a mobile phone, eight ATM cards, three Aadhaar cards and a diary containing details of 535 firms and several bank accounts, indicating the scale of the network. Raids are underway to trace at least six more members, including influential individuals who may be linked to the operation.

Racket Came to Light After Seizure of Iron-Laden Trucks
The case surfaced last month after authorities seized two iron-laden trucks in Moradabad. Following a complaint filed by a state tax officer, an FIR was registered against AK Enterprises and Saurabh Enterprises under various sections of the Bharatiya Nyaya Sanhita (BNS) related to cheating and forgery.
During the investigation, SIT officials discovered that these two shell entities were part of a much larger network of 144 fake firms, registered under the names of proprietors Ankit Kumar and Saurabh Kumar-both of whom were duped into sharing their personal documents while seeking jobs or loans.
Call Centre at Core of Scam; Fake Invoices, E-Way Bills Used to Claim ITC
During interrogation, Ikhlaq admitted he and his associates earned Rs 4-5 crore by generating fake invoices and fraudulent e-way bills for bill trading. He revealed that a Delhi-based call centre played a key role by posting online job and loan ads, harvesting victims' personal data and OTPs, and then registering companies in their names. The call centre allegedly charged Rs 30,000 to Rs 1.5 lakh per fake firm, depending on the state of registration.
Investigators said Ikhlaq purchased pre-registered shell companies in Delhi for Rs 50,000-1.5 lakh, handed them over to CAs in Ludhiana and Kanpur, and used them to create bogus e-way bills. For every Rs 100 of taxable value, he earned 30 paise, meaning a fraudulent invoice of Rs 6 crore would fetch him Rs 1.8 lakh. Money was routed through multiple bank accounts before being withdrawn, with profits split among the network.
Ikhlaq, who earlier ran a tyre-balancing and washing shop, told police he entered the fake billing racket after suffering losses and being introduced to fraudulent GST refund schemes by a man named Shahid.

