Punjab's Intelligence and Preventive Unit has dismantled an organised fake billing network with the arrest of Paramjeet Singh, Director of Ludhiana-based API Plastic Recyclers Private Ltd, for orchestrating a ₹15.56 crore Goods and Services Tax (GST) fraud involving bogus transactions worth ₹85.4 crore. Finance Minister and Excise and Taxation Minister Harpal Cheema announced the development on Friday, 8 May, adding that the total fraud figure is likely to rise as the investigation continues.

How the Fraud Was Executed

According to the minister, the Ludhiana-based firm systematically availed fake Input Tax Credit (ITC) on the basis of bogus invoices issued by non-existent and fraudulent firms spread across multiple states — entirely without the actual receipt of any goods. Investigators found that many of the supplier firms involved had already been cancelled suo moto, suspended, or declared non-functional by GST authorities.

A particularly novel modus operandi involved fraudulent debit notes through which additional fake ITC amounting to approximately ₹5.79 crore was generated. Cheema noted that these debit notes carried a glaring irregularity: the taxable value and tax amount were shown as identical — a situation that is impossible under GST law and, according to investigators, clearly establishes deliberate fabrication of records.

E-Way Bills and FASTag Data Expose Ghost Shipments

Investigators deployed a data-driven approach, cross-referencing e-way bills with FASTag toll records to verify actual vehicle movement. The analysis conclusively established that vehicles listed in transport documents were found at locations entirely inconsistent with the declared movement of goods — proving, according to the minister, that no actual transportation had taken place.

A total of 407 highly suspicious vehicle movements were identified, linked to fake ITC of more than ₹2.65 crore. Additionally, during search proceedings conducted under Section 67 of the PGST/CGST Act, blank goods receipt books belonging to various transporters were recovered from the accused's premises, indicating the systematic fabrication of transport documents to create a false trail.

Arrest and Legal Provisions

Paramjeet Singh was arrested under Sections 69 and 132(1)(c) of the Punjab Goods and Services Tax Act, 2017. Since the tax evasion amount vastly exceeds the ₹5 crore threshold, the offence is classified as cognisable and non-bailable, punishable with imprisonment of up to five years along with a fine.

Broader Crackdown Context

This bust is part of a wider enforcement push by the Punjab government against GST fraud networks that exploit fake ITC claims to siphon public revenue. The use of FASTag data as an investigative tool marks a notable evolution in how tax authorities are now deploying digital infrastructure to detect ghost transactions — a method likely to be replicated in future probes. The investigation remains ongoing, and the total fraud quantum is expected to increase as more transactions are scrutinised.