LUCKNOW, Aug. 8 -- Even as Uttar Pradesh remains nonplussed over sluggish GST growth, fake firms are eating into the state's revenue by fraudulently claiming input tax credit (ITC), without carrying out any actual transactions. A month-long drive by the state tax and the central GST departments, which is still on, unearthed a massive scam involving over 233 bogus or non-existent firms, resulting in a loss of more than Rs.120 crore to the state exchequer - and counting. "On our part, we have caught 33 bogus/non-existent firms registered under the state GST. Action, including lodging of FIRs against them, is being taken," UP state tax commissioner Nitin Bansal told HT. Another state tax department official revealed that two of the 33 firms, dealt in scraps and were based in Gorakhpur. "One of these firms fraudulently claimed ICT of Rs 18.96 crore and the other to the tune of Rs 1.93 crore. FIRs have been lodged against both," he said adding: "We have cancelled registration of 31 other firms as they were not found to be in existence." The official said about 200 other entities, all registered under central GST, were found to be paper firms involved in generating fake invoices to fraudulently claim input tax credit (ITC). "These bogus or non-existent firms collectively claimed ITC worth Rs 200 crore, resulting in a Rs 100-crore loss to Uttar Pradesh, as ITC is shared equally between the centre and the state," he revealed. Officials explained that ITC was meant to prevent tax cascading by allowing businesses to claim credit on the tax paid for inputs. However, in this case, the firms created fictitious transactions and invoices to falsely claim credit - effectively defrauding the government. The crackdown followed an internal review by chief minister Yogi Adityanath, who also holds the commercial tax/GST portfolio, after the state recorded negative or flat GST growth in three months of the current financial year. The 4% decline in GST growth vis-a-vis the corresponding period of 2024 triggered panic in the government as GST is the main source of the state government's tax earnings. Principal secretary, state tax, M Devraj directed authorities to launch a statewide campaign to identify possible causes for the low GST collections, with focus on bogus firms. "The reports of entire July have not been prepared yet. We expect the number of bogus/non-existent firms registered under the state GST to go up from 33," the official said....