Punjab Taxation Department Unearths ₹429-Crore GST Fraud Network, 62 Firms Under Scanner

Punjab’s taxation department has uncovered an alleged ₹429.30-crore Goods and Services Tax (GST) fraud involving a network of 62 interconnected firms operating across multiple states, exposing a suspected racket built on fake invoices and non-genuine transaction documents.

Punjab Finance, Excise and Taxation Minister Harpal Singh Cheema said on Wednesday that an FIR had been registered in Ludhiana and a transporter, among others, had been booked under the Bharatiya Nyaya Sanhita (BNS) and the Central Goods and Services Tax Act. The case was uncovered through intelligence gathered by the state’s State Intelligence and Preventive Unit (SIPU).

The investigation began on September 30, when a state tax officer intercepted a vehicle carrying goods purportedly being transported from Delhi to Punjab. Although the accompanying e-way bills and invoices showed deliveries to three Punjab-based firms, the alleged recipients denied placing the orders or purchasing the goods when contacted by officials.

This discrepancy prompted a deeper investigation, which, according to Cheema, revealed a suspected syndicate using fraudulent documentation to move goods and potentially facilitate tax evasion.

By analysing e-way bill records and applying data analytics, officials identified 62 interconnected firms, including 25 based in Punjab. The network had allegedly been operating predominantly since the previous financial year.

Cheema said the transporter allegedly played a key role in the operation by receiving fake invoices from other entities. The case has now been handed over to the police for a comprehensive criminal investigation into the network and the role of those involved.

Warning that the discovery could be only the tip of the iceberg, the minister has directed the taxation department to intensify scrutiny of all linked beneficiary dealers. Officials will assess whether input tax credit was wrongfully claimed or utilised and initiate recovery of the tax dues, along with applicable interest and penalties.

The department has also signalled accountability for intermediaries and transporters who knowingly facilitate such activities.

The case highlights how fake invoices, questionable e-way bills and interconnected business entities can be used to disguise transactions, making scrutiny of supply-chain records crucial to detecting suspected GST fraud. The extent of wrongful input tax credit and the individual liability of the firms involved will have to be established through the ongoing investigation.