UP SIT Busts Rs 400 Crore GST Scam Running Through 144 Fake Companies

The UP Special Investigation Team (SIT) has uncovered a Rs 400 crore GST scam involving 144 fake companies. Police said that two men from Moradabad used documents of unemployed people to create these bogus companies. Both have now been arrested.

SP (Crime) Subhash Chandra said that the main accused, Mohd Ikhlaq from Shastri Nagar in Meerut, and his partner, Ittefat Alam from Chamkani Garipura in Shahjahanpur, were detained on Saturday evening.

He added, The two accused took documents from people looking for jobs or loans and used them to create fake GST companies across the country. Police also recovered a mobile phone, eight ATM cards, three Aadhaar cards and a diary that listed 535 fake firms and many bank accounts. Raids are still going on to find the main gang leader and six others, including some influential people who may be connected to the scam.

The scam came to light after two trucks carrying iron were seized about a month ago. Following a complaint from a state tax officer, a case was registered at the Civil Lines police station in Moradabad against AK Enterprises and Saurabh Enterprises. They were charged under BNS section 318 (4) for cheating, forgery of valuable security, forgery and using forged documents.

The SIT later identified these two fake companies, along with 142 others, were registered using the names of Ankit Kumar and Sourabh Kumar. Both men had shared their documents without realising they were being tricked with false job and loan offers.

Ikhlaq and Alam were then called in for questioning, and during their interrogation, the full extent of the scam became clear. SP Chandra said that Ikhlaq admitted he and six others made around Rs 4-5 crore from the scam, with Alam helping him run the operation. He also said a call centre in Delhi was a major part of the racket. This call centre posted bogus online ads for jobs and loans to steal people’s personal details and OTPs, and then used them to register companies in their names. The call centre charged Rs 30,000 to Rs 1.5 lakh for each bogus company, depending on the state. The login details of these companies were then sent to chartered accountants on WhatsApp so they could create fake invoices and fake e-way bills.

Ikhlaq said that already-registered fake companies could be bought in Delhi for Rs 50,000 to Rs 1.5 lakh. He bought one, gave it to chartered accountants in Ludhiana and Kanpur, and started creating fake e-way bills. For every Rs 100 of fake taxable value, he earned 30 paise, so a fake invoice of Rs 6 crore would give him around Rs 1.8 lakh. The transactions were done through bank accounts, withdrawn later, and Ikhlaq kept his share while giving the rest back.

Ikhlaq told the police that he used to operate a tyre-balancing and washing shop in Shastri Nagar in 2022 but suffered big losses. After that, a man named Shahid introduced him to bill trading using fake GST companies, promising easy money through fake Input Tax Credit (ITC) refunds without needing any investment.