Chandigarh, May 8: A director of a company has been arrested in Punjab for allegedly benefiting from fraudulent input tax credit linked to a ₹15.56 crore GST scam involving fake transactions worth ₹85.4 crore. This information was shared by Harpal Singh Cheema, the state’s Finance, Excise, and Taxation Minister, on Friday.
Minister Cheema stated, “The tax department successfully dismantled a highly organized fake billing network, leading to the arrest of Parmjit Singh, director of API Plastic Recyclers Private Limited in Ludhiana.”
He further revealed that intelligence teams discovered that many supplier firms involved in the transactions had already been canceled, suspended, or declared non-operational by the relevant GST authorities. The total fraud identified so far amounts to ₹15.56 crore, and this figure may increase as the investigation continues.
Minister Cheema praised the department’s detailed analysis of e-way bills and FASTag toll data. This analysis conclusively demonstrated that vehicles listed in transport documents were found at locations that did not match the declared movement of goods, indicating that no actual transportation occurred. The investigation uncovered 407 highly suspicious vehicle movements, involving over ₹2.65 crore in fraudulent ITC.
Highlighting the severity of document forgery, the Excise and Taxation Minister noted, “Our investigation revealed a new method involving fraudulent debit notes, which generated an additional ₹5.79 crore in fake ITC. These debit notes contained significant irregularities, showing equal amounts for taxable value and tax.”
Under GST law, this is impossible and clearly indicates open manipulation of records to create fraudulent ITC. Additionally, during the search operations conducted under Section 67 of the PGST/CGST Act, various empty goods receipt books from different transporters were seized from the taxpayer’s premises, suggesting forgery of transport documents to create false records of movement.
Minister Harpal Singh Cheema confirmed that the accused was arrested on Friday based on solid evidence collected during the investigation. Given that the tax evasion amount exceeds ₹5 crore, this crime is serious and non-bailable, potentially leading to a penalty and imprisonment of up to five years. He reiterated the state’s tax department’s commitment to taking strict action against fake billing rackets and GST fraud. Continuous efforts will be made against individuals involved in generating and using fraudulent ITC that harms the state’s revenue.
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