UP SIT Unearths Massive 535 Fake Firm Network Involved in GST Tax Evasion of Rs. 989 Crore

The biggest GST evasion case, worth over 400 crore, has recently been unearthed in Uttar Pradesh by the Special Investigation Team (SIT). The tax was evaded using 535 bogus firms. According to the UP tax department, a fraudulent turnover of Rs. 5478 crore was created using these 335 fake firms, contributing to the total tax evasion of 989 crore.

During the special four-day investigation led by Additional Commissioner Grade-1 Ashok Kumar Singh, the tax officials discovered that out of 535 firms, 200 were totally fraudulent, as they did not find any actual record of transactions. They did not find any stock, transportation records, or tax payments made to these establishments. This investigation was begun after the evidence collected by SIT was handed over to the State Tax Department.

The State Tax Department uncovered that among 535 firms, 335 were noticed to be linked with A.K. Enterprises, which incurred transactions worth Rs. 5478.35 crore in various states across the country. Among these, 144 firms had already been scrutinised; when the investigation was done on the remaining ones, the entire network was exposed. Thereafter, the department flagged this case as one of the biggest tax evasion frauds in UP.

The tax officials also pointed out that the same network has also been utilised by several large firms from Delhi and Gujarat to commit large-scale tax evasion. These bogus firms were used in generating bills worth crores, causing significant loss to the government’s revenue. The entire network has now been uncovered.

Two trucks loaded with iron were confiscated on October 24 and 25 by the State Tax Department in Moradabad. During the investigation, it was revealed that two mobile numbers linked to these trucks were used to register 144 bogus firms. These firms were used to evade GST worth Rs. 400 crore.

On November 22, 2025, the Special Investigation Team (SIT) arrested the key accused, Ikhlaq, who orchestrated the entire fraud and his associate, Ittehat Alam, alias Danish Kabadi. However, the department is yet to arrest the other six key members of their gang. As of now, against the same fraud, two FIRs have been registered by the State Tax Department; one was filed from Lucknow, where complainants have flagged the names of nine businessmen and two firms.

Additional Commissioner Grade-1 Ashok Kumar Singh said that an investigation into 335 companies has uncovered the biggest GST tax evasion so far, Rs. 989 crore. He also said that the department is coordinating with the SIT, and the nationwide network involved in this fraud will soon be broken. More important findings are expected in the coming days.