Lucknow Police Uncovers Rs 2.75 Crore GST Fraud Network with Fake Firms and Bogus ITC

A joint team of the Cyber Cell, Surveillance Unit and police from Lucknow’s Itaunja uncovered a GST fraud network involving the creation of over 15 shell companies. These fake entities were used to generate and sell bogus Input Tax Credit (ITC).

The police have arrested four key individuals. However, the mastermind, Ammar Ansari of Sitapur, is still on the run. As per the police, Ansari had been imprisoned earlier in a GST fraud case. He is said to be the main operator who managed the GST registrations and ITC generation.

A complaint was registered by Abhimanyu Pathak, assistant commissioner, State Tax (Division-16, Lucknow), against a firm named Swaraj Traders. The investigations uncovered that Swaraj Traders never existed and was just used to generate and sell bogus ITC of Rs 52 lakhs during the Financial Year 2024-25.

Under this fraud, the financially weak individuals were allegedly asked to give their personal documents in return for Rs 10,000 to Rs 20,000. Attracted by this offer, the poor individuals would give the copies of their Aadhaar cards, PAN cards, bank account details, mobile numbers and address proofs.

As per the police, the accused used the documents to obtain GST registrations under the names of fake firms that never existed. After obtaining the GST registrations, these fake firms used to generate bogus ITC through fake GST returns. The firms created fabricated bills and e-way bills to show fake transactions in aluminium scrap, ferrous waste, iron, steel, tubes and pipes. The fake ITC was sold to businesses at a 1% commission, using which the businesses adjusted their tax liability.

The fraud has caused a tax loss of over Rs 2.75 crore. Police said that this was one of the biggest GST fraud crackdowns in recent months.