Kanpur police have arrested seven people for allegedly running an organised Goods and Services Tax fraud worth more than Rs 7 crore. The accused are charged with illegally claiming Input Tax Credit by creating fake firms and generating fraudulent GST invoices without any actual supply of goods.
During the arrests, police recovered a laptop, fake GST invoices, e-way bills, and a car without a number plate. Officials said the scam caused a direct loss of about Rs 7.03 crore to government revenue.
Fake Invoices Used to Claim Illegal ITC
According to Senior Superintendent of Police Brijesh Kumar Srivastava, the case emerged after a GST department officer registered seven FIRs across different police stations on different dates. These complaints triggered a coordinated police investigation into suspected GST evasion.
Investigators found that the accused issued tax invoices without any real purchase or sale of goods. Using these fake documents, they illegally availed and passed on Input Tax Credit, inflating turnover figures on paper while conducting no genuine business activity.
The fraudulent ITC was systematically circulated among shell firms, allowing the group to siphon off large sums intended as tax revenue.
Multiple Police Station Areas Linked to the Racket
Police said the same network operated across several police station jurisdictions, including Kotwali, Friends Colony, and Jaswant Nagar.
In the Friends Colony area, fake invoices were issued through firms named ML Builders and Bharat Building Material. These firms showed transactions worth crores of rupees without any physical movement of goods, resulting in large-scale fake ITC pass-on.
A similar pattern was identified in the Jaswant Nagar police station area, where fraudulent invoices were again used to claim Input Tax Credit. Investigators also found that GST registrations had been secured by misusing identity documents of unsuspecting individuals.
Officials said this misuse of personal documents added another layer to the financial crime and caused severe damage to government revenue.
Organised Gang Ran Systematic GST Theft
Preliminary investigation revealed that the fraud was carried out by an organised group rather than isolated offenders. The gang allegedly created multiple fake firms, rotated invoices among them, and ensured ITC was passed on without actual business transactions.
Based on the scale and complexity of the fraud, the SSP ordered the formation of a Special Investigation Team. The SIT conducted an extensive probe using both digital and financial intelligence tools.
Evidence was gathered by analysing call detail records, Netgrid data, surveillance inputs, Aadhaar and PAN records, rent deeds, banking transactions, electronic devices, and GST portal login activity. Information was also collected from various chartered accountants to trace compliance irregularities.
Details of the Arrested Accused
The arrested accused include:
- Nitin Gupta, son of a former corporator of Maksudpura and resident of Dabgran
- Tarun Agarwal, resident of Katra Sewakali
- Ankit Jauhari and his cousin Shiva Jauhari, residents of a colony opposite Tiksi temple
- Abhishek Kumar Shakya and Devesh Chandra Shakya, residents of Katra Shamsher Khan
- Asif, resident of Barhi Tola
Police earlier arrested Zeeshan, a cafe operator and resident of Mohalla Shahkamar, in the same case and sent him to jail.
Further Probe Underway
Police officials said the investigation is continuing to identify other beneficiaries of the illegal ITC and to determine whether additional fake firms were created as part of the racket.
Authorities are also examining financial trails to establish the full extent of the fraud and to assess the possibility of more arrests.
The case highlights ongoing efforts by enforcement agencies to curb GST evasion through shell companies and fake invoicing networks.
Source: Adapted from Times of India