On January 23, around 4 pm, a government vehicle was circling the labyrinthine lanes of Gokulpuri —a lower middle-class neighbourhood in Northeast Delhi, where localities are a mix of pucca houses and shanties.
The car finally pulled up to a modest one-floor house inside gali number 20, and two officers from the Goods and Services Tax (GST) department stepped out to ring the doorbell. It was the house of Ankush (25), who, as per the GST records at that time, owned R K enterprises.
Ankush was at work. But his father Premchand was there, as GST officials told him that his son owed crores in taxes.
“The officers told my father that I have a ‘firm’ called R K Enterprises. They told him that I made a ‘turnover’ of Rs 128 crore in just a couple of months, but no GST has been paid by me,” said Ankush.
There was one problem though: Ankush had never owned a business.
He was a contract-based ‘studio administrator’ with Physics Wallah, a coaching centre, which he joined in December last year. Premchand works for the Municipal Corporation of Delhi. The only property the family owns is their Gokulpuri home.
“They showed us a NOC signed by my father, which authorised our house to be used as an office. But it was signed in English. He doesn’t know English,” said Ankush over a call with The Indian Express.
Ankush went to the police.
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As investigators began probing the case, they asked Ankush if he had ever shared his documents with someone else. He had, he told them, in September 2025, with his childhood friend Puneet.
“Puneet had promised me a job in the GST department. I was unemployed then, and my father was the only earning member in the family. I needed the job,” said Ankush, who lives with his parents and his younger sister.
Puneet had asked for copies of his Aadhaar card, PAN card and other identity documents. Trusting him, Ankush handed them over.
Police said those documents were allegedly used to register R K Enterprises, a proprietorship firm, without his consent. It was one of hundreds of shell companies allegedly created by a GST fraud network operating out of Delhi’s Daryaganj, involved in a scam estimated at Rs 130 crore.
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On March 15, a team led by Sub-Inspector Naveen and Inspector Ramkesh of the Economic Offences Wing (EOW), busted the racket and arrested seven people — Raj and his brother Dilip Kumar, Nitin Verma, Aman Kumar, Vibhash Kumar Mitra, Mohd Waseem and Abid. On May 22, the police finally got hold of Puneet, Ankush’s friend, as well.
At the centre of the racket, police said, was Raj Kumar Dixit, a 39-year-old broker. “Raj had set up an office in Daryaganj, where he used to meet clients, both buyers and sellers. As a lot of business in real estate happens off the books, using cash, he got the idea to execute a GST fraud,” said a police officer.
Inside the ‘scam’
Under India’s GST system, businesses pay tax on goods and services they sell, but can also claim credit for the tax already paid on purchases. This mechanism, known as Input Tax Credit (ITC), is designed to avoid double taxation and forms a key part of the GST framework.
Investigators said the accused allegedly exploited vulnerabilities in this system by creating shell firms using stolen identity documents. These firms appeared legitimate on the GST portal despite existing largely only on paper.
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Fake invoices were then allegedly generated showing business transactions that never actually took place. Using these invoices, firms could fraudulently claim ITC benefits or route money through banking channels while making it appear as legitimate business activity.
Police said the fraud also exploited the fact that GST registration and invoice generation are largely digital processes that depend heavily on submitted identity documents and self-declared business transactions.
“In the current scam, Raj and his associates lured individuals under the pretext of employment — like Ankush — and collected their identity documents for misuse,” Special Commissioner of Police (EOW) Garima Bhatnagar said.
The racket, too, had been ‘perfected’ over five years.
Since 2020, police said, Nitin and Aman scoured the crowded markets of Daryaganj in search of someone with cash, preferably traders who dealt primarily in paper currency. Meat sellers, they found, were ideal.
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“They would identify traders who dealt heavily in cash and arrange cash deliveries to clients who needed unaccounted money converted into seemingly legitimate bank transactions,” a police officer said.
According to investigators, a client seeking cash would transfer money into the bank account of a shell firm. In return, associates of the racket would allegedly deliver an equivalent amount of cash — after deducting a commission — sourced from cash-heavy businesses.
Police alleged that the shell firms, created using stolen identities, were then used to generate fake GST invoices and show fictitious business transactions, allowing fraudulent ITC claims and helping disguise the movement of money.
“Raj Kunar Dixit has lived all his life in Daryaganj, where his mother used to work as a tailor near Ghata Masjid. Police said that to create fake bank accounts, he would often go near masjids in the area, and would convince poor people who lived near it to sell their bank accounts to him for Rs 15,000,” said a police officer.
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The bust
Ankush recalled his interaction with Puneet last year.
“He took me to the GST office in ITO. There was a lot of rush there. Then he called someone, and a man came and took me out of the line. He then went and sat behind a computer with a webcam, took my fingerprints and photo. It was done in minutes.”
Puneet told Ankush that soon a list would come, with names of candidates who would be getting a job.
“I called him twice over the next month, but he kept saying it will happen, it will happen,” said Ankush. “In December I got another job and took it up. I haven’t talked to him since.
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Ankush remained unaware that all this while, a business was being set up in his name using his documents, by his childhood friend.
After he filed a complaint, police lodged a case on March 24.
Joint CP (EOW) Nupur Prasad said, “A case was registered on March 24 at the EOW police station on receiving a complaint regarding fraudulent creation of a proprietorship firm, M/s R K Enterprises, using the identity documents of an unsuspecting individual on the false promise of employment in the GST Department.”
According to investigators, the victim’s Aadhaar card, PAN card, electricity bill and biometric verification details were misused to create the firm without his knowledge.
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Investigators found that transactions worth over Rs 128 crore had been routed through R K Enterprises while fraudulent ITC worth around Rs 10 crore had been claimed.
During investigation, officers identified the email ID that R K Enterprises was using, and found that the firm was still ‘live’. “A phone number linked to the email ID was found and traced to Daryaganj. We traced it and found that a man named Mohd Waseem was using it. He had also sold his account to Dixit, which showed transactions of Rs 61 crore,” said a police officer.
Police later identified several accused, including Nitin, Waseem and Abid, who allegedly helped provide bank accounts and operational support for the fake GST transactions.
Police said Raj Kumar and his brother Dilip were the main operators of the network and had allegedly created nearly 250 shell firms using forged documents.
Two other accused, Vibhash and Aman, allegedly managed the registration and operation of these firms using stolen identities.
Police said Vibhash, 34, reportedly acted as the group’s ‘accountant’. Originally from Panna, Madhya Pradesh, Vibhash had moved to Delhi in 2021. He had attempted the Chartered Accountancy exam but did not clear it. “In the process, he gained enough knowledge to assist Raj,” said a police officer.
On May 22, police also nabbed Puneet and his friend Hemant Mulani, 24, an accountant based in Bhopal.
“Puneet used to give ID copies of people to Hemant for Rs 5,000, which he accessed by promising them jobs. Till now, he has stolen the IDs of nine such people. Hemant would then use the IDs to create firms, and use his knowledge of accounts to claim input tax credit,” claimed a police officer.
Police also found that many accounts used by Raj showed that money was being paid to the accounts of a man named Ashish Sharma for buying ‘flats’.
“Sharma is in the construction business in Daryaganj, we are investigating his role,” said a police officer.
