Punjab Uncovers Rs 1,549 Crore Bogus Billing Tax Scam

Punjab Cracks ₹1,549 Cr GST Scam, Targets Bogus Billing in Gold, Coal Sectors

In one of the most wide-ranging GST enforcement drives seen at the state level, Punjab’s Taxation Department has unearthed a massive ₹1,549 crore bogus billing scam, spanning trading hubs in Ludhiana, Mandi Gobindgarh, Mohali, and beyond. The crackdown, which focused on fake invoicing and fraudulent Input Tax Credit (ITC) claims, marks a significant step forward in the state’s efforts to tighten compliance and restore integrity to high-risk sectors such as gold and coal trading.

Anatomy of the Scam: Sector-Wise Breakdown

Gold Trade – Ludhiana: Authorities detected fake invoices worth ₹900 crore and blocked around ₹21 crore in illegitimate ITC. The scale of billing irregularities in Ludhiana’s gold sector was among the highest seen in this operation.

Coal Trade – Mohali, Kharar, Kotkapura: Fake transactions amounting to ₹226 crore were uncovered, with ITC claims worth ₹12 crore flagged and blocked.

Ludhiana & Mandi Gobindgarh Combined: Across 195 firms—156 under central GST and 39 state-registered—fraudulent transactions totaling ₹423 crore were traced. Officials have already blocked ₹75.79 crore in ITC across these two industrial towns, which emerged as major hotspots during verification.

During the enforcement sweep, a vehicle transporting 2 kg of gold without documentation was intercepted, further pointing to ongoing illicit movement of high-value goods. Investigations into the source and destination of the consignment are underway.

Arrests and Syndicate Exposure

One of the key arrests involved the alleged mastermind of a ₹29.5 crore fake ITC racket. Investigators found that the firm had booked ₹163 crore in inward supplies from more than 60 entities either de-registered or deemed bogus during FY24 and FY25—a snapshot of the sophisticated layering employed by tax fraud syndicates.

Technology at the Core of Detection

A standout feature of the crackdown was the department’s reliance on cutting-edge analytics. Fifteen AI-driven fraud detection modules—developed in partnership with IIT Hyderabad—enabled granular risk assessments and firm-level targeting. Seven additional modules are in the pipeline, expected to further strengthen enforcement in the coming months.

Public Participation: ‘Mera Bill’ App Gains Traction

The “Bill Liyao Inaam Pao” reward scheme—linked to the 'Mera Bill' mobile app—played a notable role in boosting invoice culture. So far, 4,880 consumers have received ₹2.89 crore in cash prizes for uploading genuine bills, reinforcing the link between consumer behaviour and tax compliance.

Recoveries and Revenue Impact

Penalties imposed for GST mismatches: ₹9.07 crore
Recoveries already realised: ₹7.20 crore
Monthly GST growth: consistently over 12%

Since the Aam Aadmi Party (AAP) government came to power, Punjab has collected ₹62,733 crore in GST over three years—nearly matching the ₹63,042 crore collected during the previous five years under the Congress-led regime.

Policy Context and Political Undercurrent

Punjab Finance Minister Harpal Singh Cheema attributed the enforcement gains to a blend of systemic reform, technology integration, and consumer participation. He sharply criticised earlier administrations for what he described as institutional complacency and collusion, adding that restoring public trust and plugging revenue leakages have become top governance priorities under the AAP government.

Summary

The ₹1,549 crore fake billing bust—spanning high-risk commodity sectors and dense trading clusters—signals a marked shift in Punjab’s approach to GST enforcement. With over ₹108 crore in fraudulent ITC blocked, multiple arrests, and gold seizures underway, the message from authorities is clear: compliance is non-negotiable, and the days of unchecked circular trading may be numbered.