The proprietor of a Jalandhar-based firm has been arrested by the Punjab State Taxation Department for allegedly operating a fake billing racket valued at Rs 55.35 crore. The arrest was announced by Finance, Excise and Taxation Minister Harpal Singh Cheema on Thursday.
Arrest and Fraud Details
According to Minister Cheema, the enforcement action prevented the fraudulent passage of Input Tax Credit (ITC) amounting to approximately Rs 8.35 crore. This fraudulent activity was causing substantial losses to the state exchequer through wrongful Integrated GST (IGST) refund claims.
The arrested individual, Bhupinder Sharma, is the proprietor of Ramsons Corporation in Jalandhar. Preliminary investigations revealed that the firm was engaged in a large-scale fake invoicing and fraudulent ITC racket by issuing GST invoices without any actual supply of goods.
Mechanism of the Fraud
Cheema elaborated that the firm carried out bogus billing of approximately Rs 55.35 crore, which directly resulted in the wrongful availment and passing of fake ITC amounting to nearly Rs 8.35 crore. This fraudulently passed ITC was ultimately utilized by certain manufacturing firms to claim refunds of Integrated GST paid on exports, causing a substantial direct loss to the government exchequer.
Impact and Enforcement
The arrest marks a significant step in cracking down on tax evasion and fake invoicing in Punjab. The State GST Department continues its investigation to identify all entities involved in the racket and recover the lost revenue.
