Inter-State Fake GST Scam Of ₹34 Crore Busted, Accused Held

Bhopal (Madhya Pradesh): The Economic Offences Wing (EOW) has busted a major fake GST input credit racket amounting to ₹34 crore. Officials said on Friday that one accused has been arrested in connection with the fraud, which spread across Madhya Pradesh, Chhattisgarh and Maharashtra. Investigators believe this may just be tip of the iceberg.

According to EOW Director General Upendra Jain, the accused NK Khare, alias Vinod Kumar, orchestrated the scam by creating four bogus companies in names of unsuspecting villagers from Jabalpur. He used documents such as Aadhaar cards, PAN cards, land records and bank details belonging to villagers Pratap Lodi, Deendayal Lodi, Ravikant Singh and Neelesh Patel to float fake firms.

Once these shell companies were set up, Khare engaged in generating fake invoices and also conducted some real business transactions. He linked these four firms with nine operational companies, creating a web of fraudulent billing activity.

The nine active firms involved in the scam included KD Sales Corporation (Indore), Mehak Enterprises (Bhopal), Dilip Traders, Ankita Steel and Coal, Jagdamba Coal Carriers, Koraj Techniques, Mahamaya Traders, Ambar Coal Depot and Anam Traders. Together, the invoices generated by these companies amounted to over ₹150 crore, from which a fake GST component of ₹34 crore was claimed.

After learning that an FIR had been registered against him, Khare fled to Ranchi and began operating in coal trade there. However, EOW teams tracked him down, arrested him in Ranchi, and produced him before a Jabalpur court. He has been remanded to police custody until July 2.

During investigation, authorities seized a large number of documents including company letterheads, firm seals, forged bills and mobile phones linked to fraudulent transactions. Officials believe more people and entities could emerge as investigation progresses.

Modus operandi

EOW officials said that the modus operandi relied on a cascading transfer of GST liability. The operational firms routed their GST payments to downstream companies, which in turn passed the liability further. Ultimately, the trail ended at the four fake firms, which defaulted on tax payments. This deliberate gap allowed the companies to pocket the money, while Khare received a hefty commission of ₹1.70 crore, roughly five percent of the total fraud value.