Large-Scale GST Fraud Uncovered in Kanpur, Total Loss Estimated at Rs.130 Crore

Strategic Insights -

The State Goods and Services Tax (SGST) department in Kanpur has uncovered a massive GST fraud, where multiple firms registered under fictitious addresses allegedly siphoned off Rs.130 crore by falsely claiming input tax credit (ITC). The department has lodged several FIRs at the Kalyanpur police station, and further investigations are underway to identify additional beneficiaries and ascertain the full extent of the fraud. According to officials, physical verification of the declared premises found no commercial association with the proprietors, and forged documents were likely used to secure the registration.

Key Takeaways:

  • The SGST department has discovered a large-scale GST fraud, with total losses estimated at Rs.130 crore.
  • The firms involved allegedly used fictitious addresses to obtain GST registration and claim input tax credit (ITC).
  • One of the main accused, a firm proprietor, obtained GST registration on February 11, 2025, using an address in Gangaganj, Panki, but physical verification found no commercial association with the proprietor.
  • The firm declared an outward supply worth Rs.463 crore and availed ITC amounting to Rs.83.37 crore, which was subsequently passed on to another firm under suspension since April 28.
  • The firm's PAN details suggest it also obtained GST registration in Delhi.
  • Another firm from Patna allegedly used fictitious address details to availed Rs.37.87 crore through fraudulent ITC claims.
  • An individual from Maharashtra operated a firm suspected to be evading taxes to the tune of Rs.8.44 crore.
  • The SGST department has initiated legal proceedings against the accused under relevant provisions of the GST Act.

Statistics:

  • Total losses estimated at Rs.130 crore
  • Rs.463 crore outward supply declared by one of the firms
  • Rs.83.37 crore input tax credit (ITC) availed by the firm
  • Rs.37.87 crore fraudulent ITC claims by another firm from Patna
  • Rs.8.44 crore evaded taxes by an individual from Maharashtra
  • February 11, 2025 - date of GST registration of one of the main accused firms
  • April 28 - date of suspension of another firm involved in the fraud

Sources:

  • Hindustan Times
  • State Goods and Services Tax (SGST) department