Delhi youth's GST notice exposes Rs 130 crore shell firm scam; 8 arrested: Report

A 25-year-old Delhi resident who never owned a business was left stunned when GST officials arrived at his home claiming he owed crores of rupees in taxes. In a report published on 25 May, The Indian Express reported that his subsequent complaint to police has now led investigators to uncover an alleged Rs 130 crore GST fraud network that used stolen identities to create hundreds of shell firms and generate fake invoices to claim fraudulent tax credits.

The case came to light on 23 January when officials from the GST department visited the Gokulpuri residence of Ankush, informing his family that records showed he owned a firm named R K Enterprises and had generated a turnover of nearly Rs 128 crore within a few months without paying GST dues.

“There was one problem though: Ankush had never owned a business,” according to the report. At the time, he was working as a contract-based studio administrator with an educational institution, while his father was employed with the Municipal Corporation of Delhi. The family's only known asset was their modest home in northeast Delhi.

Job promise became gateway to fraud

During the investigation, Ankush informed police that he had shared copies of his Aadhaar card, PAN card and other identity documents with his childhood friend Puneet in September 2025 after being promised a job in the GST department. Unemployed at the time and facing financial difficulties, he trusted the assurance and handed over the documents.

Police allege those documents were subsequently used without his consent to register R K Enterprises as a proprietorship firm.

Investigators later concluded that the firm was one among hundreds of shell entities allegedly created by a fraud network operating out of Delhi's Daryaganj area.

According to the Economic Offences Wing (EOW), the network exploited India's GST framework by creating fake businesses, generating fraudulent invoices and claiming Input Tax Credit (ITC) benefits on transactions that never actually occurred.

How the racket operated

Special Commissioner of Police (EOW) Garima Bhatnagar said the accused allegedly targeted unemployed individuals by offering jobs and collecting identity documents that were later misused for creating shell companies.

Police said the racket was orchestrated by Raj Kumar Dixit, a Daryaganj-based broker, who allegedly developed the scheme over several years. Investigators claim shell firms were created using forged or stolen documents and then used to generate fake GST invoices that facilitated fraudulent tax credit claims and disguised movement of money.

According to investigators, clients seeking to convert unaccounted cash into apparently legitimate transactions would transfer funds into accounts linked to shell firms. The network would then allegedly deliver equivalent cash, after deducting commissions, sourced from cash-intensive businesses.

Police further alleged that poor residents were persuaded to sell bank accounts for relatively small amounts, which were later used in the fraudulent operations.

Transactions worth Rs 128 crore traced

After Ankush filed a complaint, the EOW registered a case on 24 March and began tracing digital and financial records connected to R K Enterprises. Investigators discovered that transactions exceeding Rs 128 crore had been routed through the firm and that fraudulent ITC claims of around Rs 10 crore had been generated.

A phone number linked to the firm's email account allegedly led investigators to one of the suspects operating from Daryaganj. Further enquiries helped police identify multiple individuals who allegedly provided bank accounts, forged documentation and operational support for the network.

On 15 March, an EOW team arrested seven accused — Raj Kumar Dixit, his brother Dilip Kumar, Nitin Verma, Aman Kumar, Vibhash Kumar Mitra, Mohd Waseem and Abid. Puneet, the complainant's childhood friend, was arrested on 22 May along with accountant Hemant Mulani of Bhopal.

Police allege Puneet procured identity documents by promising jobs, while Hemant allegedly used them to create firms and claim fraudulent tax credits. Investigators claim Dixit and his associates created nearly 250 shell firms using forged or stolen documents.

The EOW said the investigation is continuing and additional financial links, including transactions connected to property purchases, are under scrutiny.