HomeIndia NewsEight arrested for creating 2,660 fake companies and defrauding government of Rs 10,000 crore

Eight arrested for creating 2,660 fake companies and defrauding government of Rs 10,000 crore

Around Rs 10,000 crore has been defrauded, so far and the teams of CGST, SGST and the income tax departement have also been notified for further investigation, Police commissioner Laxmi Singh told News18 Hindi.

By CNBCTV18.com June 2, 2023, 7:43:12 PM IST (Published)

The Noida police have arrested a gang of eight people, including seven men and one woman, who created 2,660 fake companies with GST numbers. Police commissioner Laxmi Singh said the gange was causing a loss of revenue of around Rs 1,000 crore per month to the government and playing with national security, News18 Hindi reported.

Around Rs 10,000 crore has been defrauded so far, and the teams of CGST, SGST and the income tax departement have also been notified for further investigation.

Singh said a complaint was registered in Kotwali Sector 20 and they were investigating the case. After extracting the data from the registrar of companies, it was found that more than 2,600 fake companies had been formed. The suspects have the PAN card data of 6.35 lakh individuals, through which they got the companies registered.

The police have seized Rs 12.66 lakh cash, 2,660 fake GST firm lists, 32 mobile phones, 24 computer systems, four laptops, three hard drives, 118 Aadhaar cards, 140 PAN cards, fake bills, and three luxury cars from the possession of the suspects.

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Singh said that it is an organised gang that has been operating for the last five years. They were working in two teams, who did not meet the other in person. The mode of communication between the two teams was WhatsApp calling and mail. The first team would prepare fake companies with the GST number using fake documents such as Aadhaar card, PAN card, rent agreement, electricity bill, etc.

The second team would buy the fake firms with the GST number from the first team and use the fake bills to obtain the GST refund (input tax credit) and defraud the government of thousands of crores.

The gang used to illegally buy data via a service provider company to create the fake firms. They would then lure in people who were not as literate or who were always intoxicated with Rs 1,000 to Rs 1,500. They would then get fake mobile numbers from their Aadhaar cards.

After this, the gang would have a fake online rent agreement and electricity bill and use it to prepare the address of the company. The people used to get the GST refund from the government by using the fake bills prepared by the firm, which was formed with a fake GST number.

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