Rs 866 Crore GST Scam Exposed: Daily Wage Workers Used to Set Up 20 Fake Firms

In a significant operation relating to GST fraud, the Punjab Finance Department discovered a GST fraud of Rs. 866 crore from 20 fake firms created using identity documents of poor workers and unemployed people. The accused paid these workers, many of them who needed money to support their families, Rs. 800 per day to use their PAN, Aadhaar, and other identity documents so that they could be fraudulently registered for GST.

The fraud involved submitting applications for shell companies with pre-opened bank accounts. These fake firms were used to claim bogus Input Tax Credits (ITC) through fabricated transactions and bill books. A significant Rs 157.22 crore GST theft was done under the guise of taxi services alone.

Punjab Finance Minister Harpal Cheema confirmed the recovery of key evidence, including Rs 40 lakh in cash, fake bill books, and unsigned cheque books. The case has been registered in Ludhiana; the primary accused is Sarbjit Singh, who is currently absconding, and the police are working to try and arrest him.

A Ludhiana-based accountant has emerged as a significant contributor to the scam after commencing the fraud in 2023. During the part year 2023-24, the accused generated fake transactions totaling Rs 249 crore, thus falsely claiming Rs 45.12 crore of ITC and another Rs 104.08 crore of ITC for Rs 569.54 crore of fake transactions in 2024-25, and to date in the current year, Rs 8.01 crore of fake tax credits for Rs 47.25 crore of transactions.

Furthermore, a transport company named Maa Durga Road Lines is also being probed for fabricating e-way bills worth Rs 168 crore for going to Ludhiana and Delhi, but no vehicles had actually entered Punjab.

The investigation is ongoing, and more individuals linked to the scam are expected to be identified soon.