The officers of Central Goods and Service Tax (CGST) Commissionerate, Lucknow have busted a network of fake firms registered under GST who were passing ineligible input tax credit to recipient firms all over the country. In a Pan India drive to burst syndicates engaged in the creation of fake firms to fraudulently avail GST benefits, CGST Lucknow undertook an extensive operation during the months of May, June, and July 2023. Consequently, physical verifications were conducted at the addresses of 647 firms registered under the jurisdiction of CGST, Lucknow. It included districts of Lucknow, Unnao, Hardoi, Shahjahanpur, Sitapur, Lakhimpur, Barabanki, Gonda, Balrampur, Bahraich, and Shrawasti.
 
During the said drive, 131 firms were found to be non-existent and had taken GST registrations under fictitious names and used forged documents. While some firms had fraudulently taken GST registration using the 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 1355.74 crore rupees 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 and 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 197.20 crore rupees to recipient firms with the intention to evade payment of GST. The concerned tax authorities of all such recipient firms who had received input tax credits from these non-existing fake firms have been alerted for recovery of such input tax credits. The GST registrations of these fake, non-existing firms have been suspended or canceled and input tax credit (ITC) to the tune of 21.60 crore rupees available in their credit ledgers has been blocked to prevent its misuse.