On September 24, the Uttar Pradesh Police uncovered a major Goods and Service Tax (GST) fraud operation in Muzzafarnagar, involving the creation of fake businesses to generate bogus GST bills. Over the course of five years, the gang allegedly established 48 fake companies, generating fraudulent bills worth Rs925 crore, ultimately stealing Rs135 crore in GST payments.
The police arrested seven individuals linked to the scam, including the suspected mastermind, Tasleem. Other arrested gang members are Junaid, Aas Mohammad, Sethi, Asif, Moin, and Azim. The fraud operation was carried out using hawala channels for transferring the stolen funds, according to SSP Abhishek Singh.
The fraud came to light after Ashwini, a local resident from the Ratanpuri area, reported to the Cyber Crime Police Station on September 2 that his personal details, including Aadhar and PAN cards, were used to establish a fake company involved in stealing GST. A case was initially registered for Rs248 crore in stolen GST.
Upon further investigation, the police discovered that the gang had used fake invoices and created phantom businesses, allowing them to claim refunds from the GST system. Instead of transferring the stolen GST into company accounts, the commission for generating the fake bills was routed via hawala.
Azim, another arrested gang member, is suspected of facilitating the creation of fake Know Your Customer (KYC) documents for unsuspecting youth, enabling the fraudulent businesses to be set up. The gang primarily targeted traders in scrap and waste businesses across India who lacked GST registration.
While seven members have been arrested, Tasleem’s brother, Wahdat, remains on the run. The police continue to investigate the operation, and authorities are hopeful that they will apprehend the absconder soon.
This bust highlights the rising concern over GST frauds, where criminals exploit the complex tax system for illicit financial gains. The police are working to trace the remaining perpetrators and uncover further details of the scam.