Agra Trader Arrested in ₹1.62 Crore GST Fraud Scandal: Fake Power Bill & Ghost Company Linked

A major Goods and Services Tax (GST) fraud case has come to light in Uttar Pradesh’s Agra, where state tax authorities have alleged that a businessman created a fictitious trading firm using forged documents and subsequently availed fraudulent Input Tax Credit (ITC), causing a revenue loss of more than ₹1.62 crore to the government.

The Alleged Fraud

Following a complaint by the Commercial Tax Department, a criminal case has been initiated against the individual involved. The investigation centered on a company named UB Enterprises, which was allegedly established through deceptive practices. Official records indicate the firm’s proprietor was identified as Umesh Kumar Vyas, who applied for GST registration in 2020. After the registration process was completed, the entity reportedly became operational under the GST framework in 2022.

Investigation Findings

During the initial registration, the business address was listed as a location on Gwalior Road in Agra, with the declared activity being the trading of copper scrap. Authorities raised concerns after detecting irregularities in the firm’s transaction records and inconsistencies in its GST filings. The State Tax Department’s Special Investigation Branch (SIB) launched a detailed inquiry to validate the company’s operations and tax claims.

Fabricated Documents

During the probe, investigators attempted to contact the firm using the mobile numbers provided in the registration documents but found all numbers inactive. Physical verification of the premises revealed no evidence of the business’s existence. The investigation took a critical turn when officials examined the electricity bill submitted as proof of address during registration. The document was claimed to be issued by Torrent Power, but verification showed the service number listed on the bill was invalid and unverifiable through the utility provider’s records.

Fraudulent Transactions

Further analysis of financial records uncovered a network of fictitious transactions designed to exploit the GST system. Investigators allege the firm reported significant inward supplies and generated purchase records without any actual goods being received or transferred. Based on these fabricated transactions, the entity claimed substantial Input Tax Credit under GST regulations.

Revenue Loss

According to the department, the improperly obtained ITC was then used to offset tax liabilities from outward supplies reported in returns, effectively reducing or eliminating the tax due. Officials believe this method allowed the accused to gain unauthorized tax benefits while directly impacting government revenue. The State Tax Department has estimated the alleged fraud resulted in a revenue loss of ₹1,62,35,492 during the 2021–22 financial year.

Ongoing Investigation

Investigators are now assessing whether similar tactics were employed in other tax periods or through additional entities linked to the accused. Police have been involved in the case, with further legal proceedings anticipated as the probe continues. Sources familiar with the investigation note that similar instances of forged utility documents and fake GST registrations have been reported in Agra previously.

Broader Implications

This has prompted authorities to examine whether the current case is part of a larger scheme involving the creation of shell companies for fraudulent ITC claims. The case underscores the persistent challenges tax authorities face in addressing complex GST fraud schemes that rely on falsified documentation, non-existent businesses, and fabricated invoices to manipulate the tax system.

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Anuj

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