New Delhi, Jun 21 (PTI) Two men, including a lawyer, were arrested for allegedly operating a racket involving fake Goods and Services Tax (GST) firms and issuing bogus bills to facilitate fraudulent tax settlements in south west Delhi, an official said on Saturday.

The accused were identified as Sandeep (27), from Panipat in Haryana, and Inderpal (45), a lawyer residing in Burari, Delhi.

The duo used genuine identification documents such as PAN cards, Aadhaar cards, SIM cards, rent agreements, and email IDs to register fake GST firms, which were then used to generate fraudulent invoices, Deputy Commissioner of Police (Southwest) Amit Goel said.

"The matter came to light when the complainant, Sumit, alleged that while applying for GST registration using his PAN card, he was shocked to discover that two GST numbers had already been issued in his name without his knowledge or consent," the officer added.

Sumit further alleged that these firms were actively conducting business under different names and had already clocked turnovers amounting to crores of rupees, causing him reputational and financial damage.

A case was registered, and during the investigation, the GST department's data confirmed the issuance of two GST numbers linked to the complainant's PAN.

Physical verification of the addresses associated with the firms revealed that the premises were fictitious, the DCP added.

Sandeep, who was arrested in Panipat, revealed that he had been working with Inderpal for seven years. Together, they procured bogus GST firms from associates in Delhi and manipulated login credentials to gain control over the accounts.

"They would then update the contact details- email and mobile numbers, and use Tally software to create and upload fake invoices on the GST portal. Following Sandeep's arrest, the police traced Inderpal to Kairana in Uttar Pradesh, where he had gone into hiding," the DCP said in a statement.

After his arrest, Inderpal disclosed that he used to buy GST firms, along with SIM cards and login credentials, for Rs 25,000 to Rs 30,000 each.

After taking over the accounts, the duo would alter the credentials and issue fake GST bills for various clients seeking fraudulent tax adjustments. PTI SSJ MPL MPL

Fake GST firm racket using identity misuse to generate bogus invoices and enable fraudulent tax adjustments. The document describes a racket that used genuine identity documents to register and take over fake GST firms, alter contact details, and use accounting software to upload bogus invoices on the GST portal enabling fraudulent tax adjustments; investigations found multiple GST numbers linked to an unwitting PAN, fictitious addresses, and a market for buying pre-registered firms, leading to arrests of two suspects including a lawyer.