Punjab ₹87.9 Cr GST Scam: Steel Traders, Fake Bills & Arrests

GST Scam in Punjab: A Deep Dive into the Rs 87.9 Crore Fake Billing Racket

It’s not every day that you see a fake billing operation this huge get cracked. But that’s exactly what happened when officials from the Directorate General of GST Intelligence (DGGI), Ludhiana zone, exposed a complex tax scam rooted in Punjab’s iron and steel trading belt. What started as a routine intelligence alert soon unfolded into a web of fake companies, ghost transactions, and fraudulent tax credit worth crores.

The Plot: How the Scam Unravelled

Behind this multi-crore fraud were two key players: Raman Kumar Chaurasia from Mandi Gobindgarh and Devinder Singh from Khanna. They weren’t acting alone. Their transactions were propped up by fake invoices supplied by Deepanshu Srivastava and Mohit Kumar from Lucknow, who floated 37 shell companies solely to generate these bogus bills.

These documents were used to make it appear as if genuine purchases of iron and steel were taking place. In reality, the goods never moved, but the tax credit did. Fake input tax credits (ITC) worth Rs 13.4 crore were claimed off fake transactions totalling Rs 87.9 crore.

Names That Surfaced in the Probe

The DGGI investigation revealed that the Punjab-based businesses involved in the scam included Aar Dee Enterprises, Aashi Steel Industries, and Abhi Alloys. They availed fake ITC by using invoices generated by no fewer than 78 other entities — most of which existed only on paper.

Investigators didn't just rely on paper trails. They found physical evidence, mobile phone records, and even extracted confessions that confirmed the fraud was systematic and deliberate.

Arrests and What Follows

On May 15, 2025, both Chaurasia and Singh were arrested by DGGI Ludhiana and remanded to judicial custody. Authorities moved quickly, signalling that such tax fraud won’t be tolerated. The legal proceedings are now underway.

What is ITC and Why It’s Important Here

Input Tax Credit is what lets businesses reduce the tax they pay on their sales by offsetting it with the tax they’ve already paid on their purchases. It’s a legitimate benefit under GST, but only when real transactions take place.

In this case, the companies claimed ITC on transactions that never occurred. The purchases were fake, the goods never arrived, and the tax wasn’t paid — but they still claimed the refund.

Broader Impact: Not Just a Punjab Issue

This isn’t an isolated incident. GST fraud is costing India huge sums every year. Back in 2020-21 alone, tax fraud losses were estimated at around Rs 1.5 lakh crore. Mandi Gobindgarh, often referred to as Punjab’s steel heartland, has now been in the news repeatedly for similar crimes. Just a few weeks before this case, another racket worth Rs 647.4 crore in fake billing had surfaced from the same region.

DGGI’s Response and Action Plan

The DGGI has been tightening its grip on these fraudulent networks. From using data analytics and PAN-Aadhaar linkages to improved tracking through e-invoicing, the agency is becoming more tech-savvy with every case.

Their Ludhiana unit has been working especially hard in tackling fake billing scams. This case is just another example of how sustained surveillance, inter-state coordination, and sharp analysis are helping bring wrongdoers to justice.

What the Government Is Doing Now

To stop such scams from recurring, several reforms are already in motion:

Mandatory e-invoicing to monitor sales in real time.
Linking every GST registration with Aadhaar and PAN.
Strengthened audits and document scrutiny to plug loopholes.

These changes are not just reactive—they’re designed to future-proof the GST system and protect government revenues.

Final Word: A Wake-Up Call

This bust wasn’t just about one racket. It reflects how urgently businesses need to ensure compliance and transparency. Whether you’re a small trader or a large enterprise, the risks of using fake invoices are higher than ever.

For the honest taxpayer, this crackdown is a step in the right direction. For fraudsters, it’s a loud reminder: the GST net is tightening, and there's no place to hide.