Punjab cracks down on bogus billing scam worth Rs 1,549 cr, Ludhiana firms under scanner

The Punjab Taxation Department has uncovered a major bogus billing scam involving transactions worth Rs 1,549 crore, blocking fraudulent Input Tax Credit (ITC) claims amounting to Rs 108.79 crore, Finance Minister Harpal Singh Cheema announced on Monday, according to a PTI report. The crackdown, which exposed widespread fake invoicing in gold and coal trades, marks one of the largest tax fraud busts in the state’s recent history.

Addressing the media at Punjab Bhawan, Cheema said the crackdown revealed massive tax fraud operations, particularly centred in Ludhiana and Mandi Gobindgarh, with gold and coal trades being the key sectors used to generate fake invoices. "The department blocked an ITC worth Rs 21 crore by exposing fake invoices of Rs 900 crore in gold transactions in Ludhiana," the minister said, as reported by PTI.

In a separate action, coal transactions involving bogus invoices totalling Rs 226 crore across Mohali, Kharar and Kotkapura resulted in a further ?12 crore in ITC being blocked. Meanwhile, paper transactions worth Rs 423 crore in Ludhiana and Mandi Gobindgarh led to the detection and blocking of Rs 75.79 crore in fake credit.

As part of a state-wide operation, the department physically verified 195 GST-registered firms, 156 centrally and 39 state-registered. A majority of the implicated firms were based in Ludhiana (100) and Mandi Gobindgarh (72). The firms were found to have generated fraudulent invoices without any actual movement of goods.

In another major seizure, enforcement teams intercepted a vehicle travelling from Ranchi to Ludhiana carrying two kilograms of gold without an invoice. Cheema said investigations into this case are ongoing.

Highlighting a significant arrest, the minister said a key accused was apprehended for orchestrating a network of over 60 bogus firms. These entities generated fake invoices and claimed ITC worth Rs 29.50 crore on inward supplies amounting to Rs 163 crore across FY 2023-24 and 2024-25.

Cheema attributed the success of the drive to a data-driven strategy supported by 15 modules developed in collaboration with IIT Hyderabad. He also credited public participation schemes like ‘Bill Liyao Inaam Pao’ for providing key leads.

The finance minister emphasised that the AAP-led state government has collected Rs 62,733 crore in GST revenue over the past three years, nearly matching the Rs 63,042 crore collected by the previous Congress government in five years.

Cheema strongly criticised the opposition, accusing the Congress, BJP and Akali Dal of trying to undermine the government’s efforts to curb tax evasion. He alleged that these parties had previously colluded with tax evaders to divert taxpayers' hard-earned money and were now attempting to protect those involved as the government tightened its enforcement measures.