SGST Raid on Kalyanpur Manpower Firm: ₹1.72 Crore ITC Irregularity Caught, ₹20.74 Lakh Deposited; Fake Firm Crackdown Continues in Kanpur
national - Wed Sep 23
Key highlights:
SGST's SIB Range C raided a manpower supply firm in Kalyanpur.
ITC use of ₹1.72 crore through alleged bogus firm entries was found.
The firm allegedly hid tax at 18 percent; ₹20.74 lakh was deposited.
In a separate case, a fake firm in Panki Ratanpur allegedly siphoned ₹2.65 crore ITC.
Kanpur has seen hundreds of fake GST firms caught in 2026.
The State Tax Department in Kanpur has struck again in its campaign against fake billing and tax evasion. Officers of the Special Investigation Branch (SIB), Range C, have caught an Input Tax Credit (ITC) irregularity of ₹1.72 crore at a manpower supply firm in the Kalyanpur area.
After the investigation, the firm deposited ₹20.74 lakh on the spot, as per local reports published on 22–23 September 2026.
What the raid found
According to local reports:
The SGST SIB Range C team raided a manpower supplier firm in Kalyanpur.
The investigation found that the firm had used ₹1.72 crore of Input Tax Credit.
The firm's operators were allegedly taking entries through bogus firms.
In doing so, they were allegedly hiding tax at the rate of 18 percent.
No stock of goods or other documents were found at the firm's business premises.
After the investigation, ₹20.74 lakh was deposited.
The team behind the action
The action was carried out on the instructions of Joint Commissioner Rankendra. The team included Deputy Commissioners Vinay Kumar Gautam and Kavita Srivastava, and State Tax Officer Surendra Singh.
Additional Commissioner Grade-2 Kumar Anand said the bogus firms found during the raid are now being investigated.
Another case the same day: ₹2.65 crore via fake firm
This was not the only such case reported this week. In a separate matter reported on 22 September 2026, SGST officers used data analysis to catch a fake firm that had allegedly siphoned off ₹2.65 crore of ITC. When officers went to the address declared in Panki Ratanpur, the firm was not found there. ITC of ₹1.20 crore was blocked, and a complaint was filed against the firm's operator.
A bigger pattern in Kanpur
These cases are part of a much larger crackdown. Over the past year, Kanpur has repeatedly come up in reports of fake GST firms:
February 2026: Reports said 425 fake firms were found operating in Kanpur. SGST cancelled the registration of 309 of them. FIRs were registered against eight firms, and four people were arrested in one case.
Financial year 2024–25: The registrations of 36 firms were cancelled, and ITC irregularities worth ₹72 crore were caught.
February 2026: In a separate case, SGST teams raided a plastic and scrap trader in Collectorganj and found ₹2.72 crore of wrongful ITC claimed through bogus firms. ₹50 lakh was deposited.
The repeated cases show that fake billing networks remain a serious problem in the city's trading ecosystem.
Explainer: What is Input Tax Credit and how is it misused?
Under GST, a business pays tax when it buys goods or services, and collects tax when it sells. Input Tax Credit (ITC) allows the business to reduce its final tax bill by the tax it has already paid on purchases. This is a fair system when real goods and services change hands.
The problem arises when fake invoices are used. Here is how such fraud typically works:
Bogus firms are created on paper, often using borrowed or stolen identity documents.
These firms issue fake bills showing sales that never happened.
The receiving business claims ITC on these fake purchases.
The claimed ITC is used to reduce actual tax payable, which means the government loses revenue.
In service sectors like manpower supply, where GST is generally charged at 18 percent, the amount of tax at stake can be large because payroll-based billing runs into big numbers every month.
How SGST is catching such cases
Tax departments now rely heavily on data analytics. Mismatches between purchase and sale returns, firms showing large turnover with no physical presence, and sudden spikes in ITC claims are all red flags. Physical verification of declared addresses is then used to confirm whether a firm actually exists. In the Panki Ratanpur case, the firm was simply not found at its declared address.
What honest businesses should keep in mind
For genuine traders and service providers in Kanpur, these cases carry a clear warning:
Verify your suppliers. Check the GSTIN status of every supplier on the GST portal before doing business.
Match returns regularly. Reconcile your purchase records with GSTR-2B every month.
Avoid "too good to be true" bills. Offers of cheap invoices or unusual credit are a major warning sign.
Keep proper documents. Stock registers, delivery proof and payment records protect you if questions are raised.
If a business unknowingly claims ITC from a fake supplier, it can still face recovery, interest and penalties. So due diligence is not optional.
What happens next
With the bogus firms from the Kalyanpur case now under investigation, more action is possible. Depending on the findings, this could include cancellation of registrations, further recovery, and FIRs where criminal intent is established.
kanpur.live will keep tracking SGST action in the city.
How to check if a GSTIN is genuine
Any business can verify a supplier in a few minutes:
Go to the official GST portal and open the "Search Taxpayer" option.
Enter the supplier's GSTIN.
Check that the status is "Active" and that the legal name matches the invoice.
Check the registration date and principal place of business.
Look at the return filing history to see whether the supplier files returns regularly.
A newly registered firm with high turnover, irregular return filing, or an address that looks incomplete should be treated with caution.
What the law says about ITC fraud
GST law treats wrongful ITC claims seriously. The department can recover the full amount of wrongly used credit along with interest. Penalties can be as high as the tax involved in cases of fraud. In serious cases, where fake invoices are issued or used knowingly, the law also allows for prosecution and imprisonment. Registrations of fake firms are cancelled, and the ITC chain linked to them can be blocked, which affects everyone who dealt with them.
Why manpower supply is a sensitive sector
Manpower and labour supply firms handle large, regular payments for salaries and services to factories, offices and institutions. Their monthly billing is often high, which means the GST on these bills is also high. This makes the sector attractive for those who try to reduce tax through fake entries. At the same time, genuine manpower firms depend on clean compliance to win contracts from large clients, so fraud in the sector hurts honest operators too.
Kanpur's trading economy and the cost of fraud
Kanpur is one of north India's largest trading and industrial centres, with markets for leather, textiles, plastics, iron and scrap, and a large services sector. Fake billing hurts this ecosystem in more than one way. It reduces government revenue that funds roads, hospitals and schools. It also creates unfair competition, because a business that evades tax can undercut honest competitors on price. Regular enforcement, therefore, is important not only for the treasury but also for fair trade in the city.
kanpur.live view
Tax fraud may seem like a distant issue for common citizens, but its cost is borne by everyone. Every rupee lost through fake invoices is a rupee less for public services in Kanpur. At the same time, honest traders need a system where enforcement targets real offenders and does not harass genuine businesses. We will continue to track SGST action in the city and share practical compliance tips for local traders and service providers.
Frequently Asked Questions
Q1. Where did the SGST raid take place? At a manpower supply firm in the Kalyanpur area of Kanpur.
Q2. How much ITC irregularity was found? ₹1.72 crore, as per local reports.
Q3. How much money was deposited? ₹20.74 lakh was deposited after the investigation.
Q4. What is ITC fraud? Claiming tax credit on fake purchase bills issued by bogus firms, to reduce the actual tax payable.
Q5. Is this the only case in Kanpur? No. A separate ₹2.65 crore fake firm case was also reported this week, and hundreds of fake firms were found earlier in 2026.
Q6. How can I check if my supplier's GST number is genuine? Use the "Search Taxpayer" option on the official GST portal and check the status, name and filing history.
SGST Raid on Kalyanpur Manpower Firm: ₹1.72 Crore ITC Irregularity Caught, ₹20.74 Lakh Deposited; Fake Firm Crackdown Continues in Kanpur
Key highlights:
SGST's SIB Range C raided a manpower supply firm in Kalyanpur.
ITC use of ₹1.72 crore through alleged bogus firm entries was found.
The firm allegedly hid tax at 18 percent; ₹20.74 lakh was deposited.
In a separate case, a fake firm in Panki Ratanpur allegedly siphoned ₹2.65 crore ITC.
Kanpur has seen hundreds of fake GST firms caught in 2026.
The State Tax Department in Kanpur has struck again in its campaign against fake billing and tax evasion. Officers of the Special Investigation Branch (SIB), Range C, have caught an Input Tax Credit (ITC) irregularity of ₹1.72 crore at a manpower supply firm in the Kalyanpur area.
After the investigation, the firm deposited ₹20.74 lakh on the spot, as per local reports published on 22–23 September 2026.
What the raid found
According to local reports:
The SGST SIB Range C team raided a manpower supplier firm in Kalyanpur.
The investigation found that the firm had used ₹1.72 crore of Input Tax Credit.
The firm's operators were allegedly taking entries through bogus firms.
In doing so, they were allegedly hiding tax at the rate of 18 percent.
No stock of goods or other documents were found at the firm's business premises.
After the investigation, ₹20.74 lakh was deposited.
The team behind the action
The action was carried out on the instructions of Joint Commissioner Rankendra. The team included Deputy Commissioners Vinay Kumar Gautam and Kavita Srivastava, and State Tax Officer Surendra Singh.
Additional Commissioner Grade-2 Kumar Anand said the bogus firms found during the raid are now being investigated.
Another case the same day: ₹2.65 crore via fake firm
This was not the only such case reported this week. In a separate matter reported on 22 September 2026, SGST officers used data analysis to catch a fake firm that had allegedly siphoned off ₹2.65 crore of ITC. When officers went to the address declared in Panki Ratanpur, the firm was not found there. ITC of ₹1.20 crore was blocked, and a complaint was filed against the firm's operator.
A bigger pattern in Kanpur
These cases are part of a much larger crackdown. Over the past year, Kanpur has repeatedly come up in reports of fake GST firms:
February 2026: Reports said 425 fake firms were found operating in Kanpur. SGST cancelled the registration of 309 of them. FIRs were registered against eight firms, and four people were arrested in one case.
Financial year 2024–25: The registrations of 36 firms were cancelled, and ITC irregularities worth ₹72 crore were caught.
February 2026: In a separate case, SGST teams raided a plastic and scrap trader in Collectorganj and found ₹2.72 crore of wrongful ITC claimed through bogus firms. ₹50 lakh was deposited.
The repeated cases show that fake billing networks remain a serious problem in the city's trading ecosystem.
Explainer: What is Input Tax Credit and how is it misused?
Under GST, a business pays tax when it buys goods or services, and collects tax when it sells. Input Tax Credit (ITC) allows the business to reduce its final tax bill by the tax it has already paid on purchases. This is a fair system when real goods and services change hands.
The problem arises when fake invoices are used. Here is how such fraud typically works:
Bogus firms are created on paper, often using borrowed or stolen identity documents.
These firms issue fake bills showing sales that never happened.
The receiving business claims ITC on these fake purchases.
The claimed ITC is used to reduce actual tax payable, which means the government loses revenue.
In service sectors like manpower supply, where GST is generally charged at 18 percent, the amount of tax at stake can be large because payroll-based billing runs into big numbers every month.
How SGST is catching such cases
Tax departments now rely heavily on data analytics. Mismatches between purchase and sale returns, firms showing large turnover with no physical presence, and sudden spikes in ITC claims are all red flags. Physical verification of declared addresses is then used to confirm whether a firm actually exists. In the Panki Ratanpur case, the firm was simply not found at its declared address.
What honest businesses should keep in mind
For genuine traders and service providers in Kanpur, these cases carry a clear warning:
Verify your suppliers. Check the GSTIN status of every supplier on the GST portal before doing business.
Match returns regularly. Reconcile your purchase records with GSTR-2B every month.
Avoid "too good to be true" bills. Offers of cheap invoices or unusual credit are a major warning sign.
Keep proper documents. Stock registers, delivery proof and payment records protect you if questions are raised.
If a business unknowingly claims ITC from a fake supplier, it can still face recovery, interest and penalties. So due diligence is not optional.
What happens next
With the bogus firms from the Kalyanpur case now under investigation, more action is possible. Depending on the findings, this could include cancellation of registrations, further recovery, and FIRs where criminal intent is established.
kanpur.live will keep tracking SGST action in the city.
How to check if a GSTIN is genuine
Any business can verify a supplier in a few minutes:
Go to the official GST portal and open the "Search Taxpayer" option.
Enter the supplier's GSTIN.
Check that the status is "Active" and that the legal name matches the invoice.
Check the registration date and principal place of business.
Look at the return filing history to see whether the supplier files returns regularly.
A newly registered firm with high turnover, irregular return filing, or an address that looks incomplete should be treated with caution.
What the law says about ITC fraud
GST law treats wrongful ITC claims seriously. The department can recover the full amount of wrongly used credit along with interest. Penalties can be as high as the tax involved in cases of fraud. In serious cases, where fake invoices are issued or used knowingly, the law also allows for prosecution and imprisonment. Registrations of fake firms are cancelled, and the ITC chain linked to them can be blocked, which affects everyone who dealt with them.
Why manpower supply is a sensitive sector
Manpower and labour supply firms handle large, regular payments for salaries and services to factories, offices and institutions. Their monthly billing is often high, which means the GST on these bills is also high. This makes the sector attractive for those who try to reduce tax through fake entries. At the same time, genuine manpower firms depend on clean compliance to win contracts from large clients, so fraud in the sector hurts honest operators too.
Kanpur's trading economy and the cost of fraud
Kanpur is one of north India's largest trading and industrial centres, with markets for leather, textiles, plastics, iron and scrap, and a large services sector. Fake billing hurts this ecosystem in more than one way. It reduces government revenue that funds roads, hospitals and schools. It also creates unfair competition, because a business that evades tax can undercut honest competitors on price. Regular enforcement, therefore, is important not only for the treasury but also for fair trade in the city.
kanpur.live view
Tax fraud may seem like a distant issue for common citizens, but its cost is borne by everyone. Every rupee lost through fake invoices is a rupee less for public services in Kanpur. At the same time, honest traders need a system where enforcement targets real offenders and does not harass genuine businesses. We will continue to track SGST action in the city and share practical compliance tips for local traders and service providers.
Frequently Asked Questions
Q1. Where did the SGST raid take place? At a manpower supply firm in the Kalyanpur area of Kanpur.
Q2. How much ITC irregularity was found? ₹1.72 crore, as per local reports.
Q3. How much money was deposited? ₹20.74 lakh was deposited after the investigation.
Q4. What is ITC fraud? Claiming tax credit on fake purchase bills issued by bogus firms, to reduce the actual tax payable.
Q5. Is this the only case in Kanpur? No. A separate ₹2.65 crore fake firm case was also reported this week, and hundreds of fake firms were found earlier in 2026.
Q6. How can I check if my supplier's GST number is genuine? Use the "Search Taxpayer" option on the official GST portal and check the status, name and filing history.