Massive GST Scam Busted in UP: 16 Firms Linked to One Bank Account, ₹500-Crore Tax Evasion — STF Nabs 8 Key Members

In a major blow to tax fraud operations, Uttar Pradesh’s Special Task Force (STF) has uncovered a large-scale Goods and Services Tax (GST) evasion racket involving at least 16 shell companies linked to a single bank account. Authorities estimate the scam resulted in tax losses of nearly ₹500 crore, raising serious concerns about systemic loopholes in financial and tax monitoring systems.

Single Account, Multiple Firms

Investigators revealed that the fraudulent network was operating primarily from Meerut, with all financial transactions routed through one account held at a Yes Bank branch in Delhi’s Janakpuri area. Despite being associated with 16 separate firms registered under different names, the account handled transactions worth approximately ₹268 crore between January and mid-October 2023.

The STF said the unusual pattern—multiple companies conducting business through one account—went undetected by both banking compliance mechanisms and GST oversight systems for months.

Fake Identities and Forged Documents

According to officials, the account was opened by one of the main accused, Dilshad, who allegedly coordinated the creation of shell companies using forged documentation. The group is accused of collecting identity proofs, PAN cards, and other personal documents from unsuspecting individuals.

To legitimize the fake firms, the accused allegedly used fabricated rent agreements, falsified electricity bills as address proof, and pre-activated SIM cards obtained through false identities. These firms existed largely on paper and were used to generate fake invoices and manipulate Input Tax Credit (ITC) claims.

Firms Used in the Scheme

Authorities have identified 16 entities so far, including trading and enterprise firms registered under different names but controlled by the same group. These companies were allegedly used to show fictitious business activity and circulate fake bills, enabling the diversion of funds and large-scale GST evasion.

Arrests and Ongoing Probe

On December 26, the STF arrested eight key individuals believed to be central to the operation. Officials say the accused systematically set up shell companies, generated fraudulent invoices, and siphoned off money by abusing GST mechanisms.

Investigators have already confirmed tax evasion exceeding ₹500 crore and say the figure could rise as more records are examined. Several additional bank accounts and firms are now under scrutiny.

More Arrests Likely

STF officials believe the racket involved a wider network, potentially including individuals who assisted with technical operations, banking processes, and procurement of fake identity documents. Authorities say more suspects have been identified and further arrests are expected.

Government agencies are now conducting a comprehensive review of bank transactions, GST filings, and billing data to trace the complete money trail and recover lost tax revenue. Departments are also examining why automated alerts failed to flag such high-value, suspicious transactions.

“The investigation is ongoing, and the entire network will be exposed,” an STF official said.

The case has intensified calls for stronger coordination between tax authorities and financial institutions to prevent similar large-scale frauds in the future.