Fake GST racket busted in Lucknow: 4 arrested, ₹27.25 lakh fraud exposed
Synopsis
Lucknow's Crime Branch cracked a GST carousel fraud where four accused used a shell firm — M/s Ghanshyam Enterprises — to circulate fake Input Tax Credit with zero real trade, draining ₹27.25 lakh from the exchequer. Six mobile phones seized; the probe is expanding to linked firms and potential accomplices.
Key Takeaways
The Lucknow Crime Branch and Hasanganj Police jointly busted a fake GST racket on 23 August 2025 .
Four accused — Vaibhav Singh , Mohd Arsan , Vikas Kumar , and Mohd Saqib — have been arrested.
The gang used shell firm M/s Ghanshyam Enterprises to generate fraudulent Input Tax Credit (ITC) through paper transactions with no real business activity.
Estimated government revenue loss stands at approximately ₹27.25 lakh .
Six mobile phones were recovered; the case is registered under Crime No.
130/2025 at Police Station Hasanganj.
Investigators are probing additional accomplices and linked firms as the inquiry widens.
The Lucknow Crime Branch has dismantled a fake GST racket in which four individuals created fictitious firms using forged documents to generate and circulate fraudulent Input Tax Credit (ITC), causing a loss of approximately ₹27.25 lakh to the government exchequer. The arrests were made in a joint operation with Hasanganj Police on 23 August 2025.
How the Fraud Operated
According to officials, the accused obtained a Goods and Services Tax Identification Number (GSTIN) for a shell entity — M/s Ghanshyam Enterprises — purportedly engaged in trading unwrought lead waste, parings, and plastic scrap. The firm had no actual business activity behind it.
Using this fraudulent registration, the accused contacted legitimate companies and passed on fake ITC through a web of paper transactions. The circular ITC transfers allowed multiple entities to claim tax credits without any real goods or services changing hands — a classic GST carousel fraud.
The Arrests and Evidence Recovered
Acting on a complaint received on 30 August 2025 regarding M/s Ghanshyam Enterprises, investigators spent weeks analysing technical and documentary evidence before moving in. Under the supervision of Additional Deputy Commissioner of Police (Crime) Kiran Yadav, the joint team apprehended four accused: Vaibhav Singh, Mohd Arsan, Vikas Kumar, and Mohd Saqib. Police recovered six mobile phones from the suspects.
Legal Action Initiated
The case has been registered as Crime No. 130/2025 at Police Station Hasanganj under Sections 319(2), 318(4), 338, 336(3), 340(2), and 61(2) of the Bharatiya Nyaya Sanhita (BNS). ADCP (Crime) Kiran Yadav confirmed that legal proceedings are underway against all four arrested individuals.
Investigation Ongoing
Officials said the probe is widening to identify other accomplices and associated firms that may have benefited from the fake ITC network. The Crime Branch is analysing digital and documentary evidence to map the full extent of the racket. Notably, GST carousel frauds — where ITC is passed through a chain of shell firms with no underlying trade — have been a growing challenge for tax enforcement agencies across India.
This is among a series of GST fraud busts reported in Uttar Pradesh in 2025, reflecting intensified enforcement by state police in coordination with tax authorities. Further arrests are possible as the investigation progresses.
Point of View
But the Lucknow bust highlights how low the barrier to entry remains: a forged registration and a network of compliant firms is all it takes. The ₹27.25 lakh loss figure here is modest, but such rackets typically scale fast before detection. The real question is how M/s Ghanshyam Enterprises passed GST registration scrutiny in the first place — a process that is supposed to include physical verification. If the investigation surfaces systemic gaps in the GSTIN issuance process, the story is bigger than four arrests.
NationPress
23 Aug 2026
Frequently Asked Questions
What was the fake GST racket busted in Lucknow?
The Lucknow Crime Branch dismantled a network in which accused persons created a fictitious GST-registered firm, M/s Ghanshyam Enterprises, using forged documents to generate and circulate fraudulent Input Tax Credit with no real business activity. The fraud caused an estimated ₹27.25 lakh loss to the government exchequer.
Who were the four people arrested in the Lucknow GST fraud case?
The four arrested individuals are Vaibhav Singh, Mohd Arsan, Vikas Kumar, and Mohd Saqib. They were apprehended in a joint operation by the Lucknow Crime Branch and Hasanganj Police on 23 August 2025.
What is Input Tax Credit (ITC) fraud?
Input Tax Credit allows businesses to offset the GST paid on inputs against their GST liability on sales. In ITC fraud, shell firms generate fake invoices to claim credits without any actual goods or services being exchanged, effectively stealing tax revenue from the government.
What legal sections have been applied in this case?
The case is registered as Crime No. 130/2025 at Police Station Hasanganj under Sections 319(2), 318(4), 338, 336(3), 340(2), and 61(2) of the Bharatiya Nyaya Sanhita (BNS). Legal proceedings against all four accused are underway.
Is the investigation still ongoing?
Yes. Authorities are examining digital and documentary evidence to identify additional accomplices and associated firms that may have participated in the fake ITC network. Further arrests remain possible as the probe expands.
