GST Commissionerate Busts Network Of 131 Fake Firms Under Lucknow Zone, Fraud Worth Rs 197 Crore Unearthed

In a major action against firms fraudulently availing GST benefits, the Central Goods & Service Tax (CGST) Commissionerate, Lucknow has busted a network of fake firms registered under GST, who were passing ineligible input tax credit to recipient firms all over the country. 

The CGST office Lucknow conducted a special operation during May, June and early July, as a part of the special pan India drive to burst the syndicates operating across the country engaged in creation of fake firms to fraudulently avail GST benefits. 

Physical verifications were conducted at the addresses of 647 firms registered under the jurisdiction of CGST Lucknow from the districts of Lucknow, Unnao, Hardoi, Shahjahanpur, Sitapur, Lakhimpur, Barabanki, Gonda, Balrampur, Bahraich and Shrawasti

During the drive,131 firms were found to be non-existent who had taken GST registrations on fictitious names and using forged documents. While some firms had fraudulently taken GST registration using PAN of some other persons, some had forged rent agreements or electricity bills and mentioned addresses that were actually non-existent. 

These 131 fake.non-existing firms had shown supplies of goods/services worth Rs. 1355.74 crores to about 1100 recipient firms spread all over the country, but these supplies had not actually taken place. Most of the recipient firms are located in Uttar Pradesh, Haryana and Delhi. 

The major commodities shown in these fake supplies are waste & scrap, plywood and veneer. These bogus supplies of goods/services were shown in records to pass on the benefit of ineligible input tax credit to the tune of Rs.197.20 crores to recipient firms with intention to evade payment of GST. The concerned tax authorities of all such recipient firms who had received input tax credit from these non-existing fake firms have been alerted for recovery of such input tax credit. The GST registrations of these fake, non-existing firms have been suspended/cancelled and input tax credit (ITC) of Rs.21.60 crores available in their credit ledgers has been blocked to prevent its misuse.