Taxmen Uncover Rs 250 Cr GST Fraud In UP’s Kanpur; Transactions Done From Accounts Of Rickshaw Pullers, Scrap Pickers

Sleuths from the Kanpur division of the Income Tax (IT) department have exposed a GST scam, where transactions worth crores of Rupees were done using fake accounts.

Kanpur, UP: The Income Tax department has uncovered a GST fraud amounting to a whopping Rs 250 Crore in Uttar Pradesh’s Kanpur.

According to an India Today report, sleuths from the Kanpur division of the Income Tax (IT) department have exposed a GST scam, where transactions worth crores of Rupees where performed using accounts belonging to daily-wage earners like scrap pickers and rickshaw pullers, in a bid to evade income tax and the Goods and Services Tax or GST.

Quoting sources in the Income Tax department sources, the report said that the alleged mastermind of the scam is a resident of Kanpur’s Bhusa Toli area which is renown for its massive scrap market.

As per the report, the accused had opened fake companies registered in the name of scrap dealers and rickshaw pullers and used them to open bank accounts with fake addresses.

The accused, on the pretext of giving them a monthly sum of Rs 10,000, allegedly obtained signatures, cheque books, bank details and ATM cards from these gullible people, and used their bank accounts to deposit cash which he later withdrew through cheques, the report said.

According to the report, transactions amounting to over 250 crore were done by the accused using these fake bank accounts, costing the state exchequer more than Rs 80 crore in tax fraud.

The matter came to the for four persons who work as scrap collectors— Amit Kashyap, Somal Tiwari, , Safal Singh and Pradeep—approached the GST and Income Tax Department and informed them about the fraud accounts.

Based on their complaint, the IT department issued notices to these fake companies, the report said.

A senior IT department official said they would write to the Reserve Bank of India (RBI) in this connection to ask for a probe and question bank officials about how bank accounts were opened and operated without a proper background check, the report said.

More details are awaited and further investigation is underway, the official said, adding that the department is investigating whether more people are involved in the scam and how deep and does this nexus reach.