Sharing details of the operation, Finance Minister Harpal Singh Cheema said the tax department had successfully uncovered a sophisticated fake billing racket and arrested Parmjeet Singh, Director and authorised signatory of M/s API Plastic Recyclers Private Limited, Ludhiana, for allegedly availing fraudulent Input Tax Credit through fake transactions worth Rs 85.4 crore and orchestrating a GST fraud amounting to Rs 15.56 crore.
Explaining the investigation, the minister said the accused firm was involved in systematic and organised tax evasion. According to the probe, the company allegedly claimed fraudulent Input Tax Credit on the basis of fake invoices issued by non-existent and fraudulent firms operating across several states, despite no actual receipt of goods.
Cheema further revealed that intelligence teams discovered that several supplier firms involved in the transactions had already been automatically cancelled, suspended, or declared non-functional by the respective GST authorities. He stated that the fraud detected so far stands at Rs 15.56 crore, while the figure is expected to rise further as the investigation continues aggressively.
Exposing the intricate network of tax fraud, the Excise and Taxation Minister praised the department’s detailed analysis of e-way bills and FASTag toll data, which played a crucial role in cracking the case. He said the analysis conclusively established that vehicles mentioned in transport documents were located at places completely inconsistent with the declared movement of goods, proving that no actual transportation had taken place. Investigators identified 407 highly suspicious vehicle movements involving fraudulent Input Tax Credit exceeding Rs 2.65 crore.
Highlighting the seriousness of document forgery in the case, Cheema said the investigation also uncovered a new method involving fraudulent debit notes used to generate an additional fake Input Tax Credit of nearly Rs 5.79 crore. He noted that the debit notes contained major irregularities, including taxable value and tax amount being shown as identical figures, which is legally impossible under GST provisions and clearly indicates deliberate manipulation of records to generate fraudulent tax benefits.
The minister further disclosed that during search operations conducted under Section 67 of the Punjab Goods and Services Tax and Central Goods and Services Tax Acts, authorities recovered blank goods receipt books belonging to various transporters from the taxpayer’s premises. Officials believe these documents were intended to fabricate false transportation records to support the fake transactions.
Issuing a stern warning to tax evaders, Harpal Singh Cheema stated that based on substantial evidence collected during the investigation, the accused was arrested on May 8, 2026 under Sections 69 and 132(1)(c) of the Punjab Goods and Services Tax Act, 2017. He emphasised that since the amount involved in the tax evasion exceeds Rs 5 crore, the offence is categorised as serious and non-bailable, carrying punishment of up to five years imprisonment along with financial penalties.
Reiterating the Punjab government’s commitment to combating fake billing rackets and GST fraud, the minister asserted that the state tax department would continue taking stringent action against individuals involved in generating and using fraudulent Input Tax Credit schemes that cause massive losses to state revenue. The operation marks one of the most significant crackdowns on organised GST fraud in Punjab and signals intensified enforcement against financial crimes targeting the taxation system.
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