UP Cracks Down On Shell Firms: Yogi Adityanath Targets Tax Evasion, GST Revenue

Chairing a high-level review meeting of the State Tax Department, the CM emphasised the importance of strict enforcement, transparency, and the use of technology in strengthening the tax framework.

Adityanath stressed that GST is a consumer-driven tax regime, and therefore, areas with larger populations should be contributing more to the state’s revenue.

Source : PTI

Uttar Pradesh Chief Minister Yogi Adityanath on Saturday called for a strong crackdown on shell companies and fraudulently registered firms, terming any attempt to exploit benefits meant for legitimate traders as “unforgivable.” Chairing a high-level review meeting of the State Tax Department, the Chief Minister emphasised the importance of strict enforcement, transparency, and the use of technology in strengthening the tax framework, reported PTI.

“Tax evasion is a national crime that negatively impacts development plans and welfare schemes,” he asserted, directing officials to ensure accountability across the board. He urged the department to build systems that not only identify evaders but also protect honest taxpayers.

Adityanath stressed that GST is a consumer-driven tax regime, and therefore, areas with larger populations should be contributing more to the state’s revenue. He advised the department to develop targeted strategies for regions that are falling short of expectations in tax collection.

GST Fraud, Inspections, and Accountability Measures

Addressing concerns about fraudulent registrations, the Chief Minister asked officials to take immediate action. In cases under Central GST (CGST), he directed that all suspicious entries be flagged to the Centre for registration cancellation. For State GST (SGST) cases, he instructed thorough departmental investigations. “If irregularities are found, their registration should be cancelled and FIRs lodged,” he said.

Further, he called for mandatory physical verification of all newly registered firms, adding, “fake companies should not be allowed to obstruct the rights of honest taxpayers. Such inspections are essential to ensure that genuine businesses can operate fairly and without interference.”

Highlighting the importance of maintaining consistent revenue flows, Adityanath was briefed that Rs 18,161.59 crore in GST and VAT had been collected in April and May. This figure is part of the larger annual target of Rs 1,75,725 crore for the 2025–26 financial year.

While praising the performance of 14 zones—including both Lucknow divisions, Ayodhya, Bareilly, Agra, Ghaziabad, Gautam Buddha Nagar, Meerut, Jhansi, and Saharanpur—for achieving over 60 per cent of their targets, he expressed dissatisfaction with underperforming zones such as Varanasi-I, Prayagraj, Kanpur-II, Etawah, Aligarh, and Moradabad. These areas, he noted, had reported collections below the 50 per cent mark.

He instructed officials to prepare a detailed report on low-performing areas and submit it to the government for review. “Revenue is not just a number, it’s the foundation of development,” the CM stated, urging officers to approach their duties with both responsibility and sensitivity.

Adityanath called for greater interaction between tax officials and the trading community. “In areas with weak tax collection, Additional, Joint, and Deputy Commissioners should personally engage with traders to build trust, cooperation, and a sense of compliance among the taxpayer community,” he said.