The Enforcement Directorate (ED) has uncovered a massive GST fraud involving Rs 3,089.57 crore in Punjab's steel hub, Mandi Gobindgarh. Five businessmen from Mandi Gobindgarh and Fatehgarh Sahib districts have been booked in connection with the case, which involves fake invoicing and cash withdrawals from Agriculture Produce Market Committee (APMC) bank accounts.
FIR Filed in Ludhiana
An FIR was registered at Jamalpur police station in Ludhiana based on a complaint by Suraj Kumar Yadav, Assistant Director of the ED, New Delhi. The accused are Amit Kumar Goyal, Manish Kumar, Gaurav Aggarwal, and Balwant Singh from Mandi Gobindgarh, and Gurdeep Singh from Amloh. The ED was investigating suspicious transactions and suspected money laundering involving multiple entities allegedly controlled by the same group, sharing common addresses, phone numbers, and email IDs.
Modus Operandi
According to the complaint, the entities were created to layer high-value funds through fake GST invoicing and cash withdrawals totaling Rs 3,089.57 crore from APMC bank accounts at various branches of IDFC First Bank, along with additional transactions through other banks. The ED's investigation under the Foreign Exchange Management Act (FEMA), 1999, revealed that payments received via RTGS transfers into accounts of fake firms were routed to APMC bank accounts operated by proprietorship concerns. This arrangement facilitated large-scale cash withdrawals while avoiding tax deduction at source (TDS) liabilities under Section 194N of the Income Tax Act, 1961. Cash was withdrawn through 25 bank accounts with IDFC First Bank.
DGGI Investigation
The Directorate General of Goods and Services Tax Intelligence (DGGI), Ludhiana Zonal Unit, had earlier investigated fraudulent transactions by Amit Kumar Goyal and his brother Manish Kumar. The DGGI found that the accused created 27 fake or bogus firms to siphon funds and generate fraudulent Input Tax Credit (ITC). The network generated and passed on fraudulent ITC worth approximately Rs 108.49 crore against total billing of Rs 720.97 crore, causing losses to the government exchequer.
Seizures and Arrests
Search operations by the DGGI in Ludhiana led to the seizure of 54 cheque books, 46 ATM cards, five voter identity cards, 11 PAN cards, seven stamps, multiple mobile phones, hard disks, laptops, and loose documents linked to other firms. The recovered material established that the two brothers operated dummy firms in the names of other individuals by misusing their identification documents. Both were arrested on October 9, 2024, and granted regular bail on July 28, 2025.
Analysis of Digital Evidence
Data extracted from mobile phones and digital devices, obtained from the DGGI, was analyzed alongside KYC records from various banks. Amit Kumar Goyal allegedly created 27 fake firms. Two of them—N.R. Steels and Goyal Steel Industries—were registered using his own PAN number (AIBPG9505H), while the remaining 25 were established using KYC documents of other individuals, many financially vulnerable. Several entities shared the same registered email address and mobile number. Digital devices also revealed KYC documents of multiple individuals used to create the firms and invoices linked to those entities.
Historical Context
Officials noted that fraudulent billing rackets have operated in Mandi Gobindgarh for years. GST authorities, CGST, and other central agencies have previously detected GST evasion through shell companies in Punjab's steel town.
Detailed Modus Operandi
The racket operated through 27 bogus firms that issued fake invoices to generate fraudulent ITC. Payments received via RTGS transfers into these firms' accounts were routed to APMC bank accounts, from which cash withdrawals were made. Using APMC accounts helped avoid withdrawal limits and TDS compliance. The withdrawn cash was then returned to beneficiary firms after deducting a commission.
