Ghaziabad man held for making fake firms in ₹10k cr GST fraud

He would pay the destitutes ₹1,000 to ₹1,500 for Aadhaar cards and use the documents to create shell firms, generate fake invoices and avail ITC from the government

A 31-year-old man was arrested for his alleged involvement in creating bogus firms using stolen or fake identities to use them to avail of input tax credit (ITC) as part of a ₹10,000 crore Goods and Services Tax (GST) fraud, officers said on Thursday.

The suspect, identified as Babar Khan, was absconding for last nine months and carried a reward of ₹25,000 on his arrest. (HT Photo)

The suspect, identified as Babar Khan, was absconding for last nine months and carried a reward of ₹25,000 on his arrest.

On June 1, 2023, Noida police busted a gang suspected of orchestrating a ₹10,000 crore GST fraud. The gang’s operation involved registering thousands of shell firms to generate expressway (e-way) bills and obtain ITC from the government. During investigation, police found that over 2,000 bogus firms were created using fake Aadhaar cards, PAN cards, and were used to avail ITC.

According to Shakti Avasthy, deputy commissioner of police (crime), Khan was arrested from his residence in Loni, Ghaziabad on Thursday by the Sector 20 police team and crme response team of Noida police.

“During investigation, it was found that he was involved in arranging destitute people to use their Aadhaar cards. He would provide the identity documents of such people to the other members of the gang who further used them to create bogus firms, ultimately used to avail of ITC,” the DCP said.

Khan was involved with the gang since 2021, and the exact number of IDs he has misappropriated is yet to be ascertained, the officer said.

Explaining the modus operandi of the suspect, the DCP shared that Khan would find destitute people living in slums or temporary settlements.

“He would then pay them ₹1,000 to ₹1,500 for their Aadhaar cards. Using these documents, the suspects created shell companies and used them to generate fake invoices and avail ITC from the government,” the officer said

Khan was booked under charges of cheating and forgery, and sent to judicial custody after being produced before a local court on Thursday.

With the latest arrest, the Noida Police has arrested as many as 47 people allegedly involved in the scam. These include residents from Delhi, Noida, Ghaziabad, Sirsa (Haryana), Jaipur (Rajasthan), and Chhindwara (Madhya Pradesh).

On June 3 this year, the Noida police had invoked charges under the Gangster Act against 33 of the arrested accused in the GST fraud case.