GST Fraud worth Rs.250 Crore detected in Kanpur

A team from the Income Tax Department’s Kanpur division discovered a nexus in which transactions worth several crores were being made from the accounts of garbage pickers and rickshaw pullers in order to avoid GST or income tax.

The mastermind of the nexus, according to Income Tax agency sources, works in Kanpur’s Bhusa Toli region, which is known for its vast trash market.

The defendants set up many businesses using the names of hundreds of rubbish sellers and rickshaw pullers. These bogus businesses were used to create bank accounts under fictitious names and with fictitious locations. The accused got signatures, check books, and even bank data and ATM cards from unsuspecting victims in exchange for a Rs.10,000 monthly payment. Payments were placed into their bank accounts and withdrawn via checks.

The accused engaged in transactions totaling more than Rs.250 crore and cheated the agencies to the tune of more than Rs.80 crore.

Amit Kashyap, Somal Tiwari, Safal Singh, and Pradeep, who work as scrap collectors, contacted the GST and Income Tax Departments about the situation. These businesses were then served with notifications.

A top Income Tax officer stated that he will write to the RBI about the situation and urge asking bank officials about how the bank accounts were established without necessary background checks.

More investigation is being conducted.