The Punjab GST Department has intensified its investigation into a major fake billing racket uncovered in Jalandhar, officials say the case could expand further as several export companies and other firms are now being examined for their possible links to fake invoices used to claim tax benefits illegally.
According to the GST Department, Ramsons Corporation, operated by Bhupinder Singh, was allegedly involved in creating fake business transactions without any actual purchase or sale of goods, officials said the firm allegedly generated fake invoices in the scrap trade and caused a loss of around ₹8.35 crore to the government by fraudulently claiming Input Tax Credit (ITC) while the owner, Bhupinder Singh, has been apprehended by the department as part of the ongoing investigation.
Senior Punjab Excise and Taxation Department officer Pawanjit Singh confirmed the action and said the investigation is still in progress and verification of records is continuing and added that strict legal action will be taken against every firm found to be involved in the fake billing network.
Officials said more than 10 companies are currently under investigation and they are checking whether these firms purchased fake invoices to show business transactions that never actually took place, such fake invoices can allegedly be used to convert unaccounted money into accounted money, reduce tax liability and claim benefits available under export-related schemes.
According to the department, Ramsons Corporation allegedly did not carry out genuine business transactions. Instead, officials said the firm only issued invoices without purchasing or supplying actual goods.
The GST Department said the fraud was detected with the help of its Artificial Intelligence-based Business Intelligence and Fraud Analytics system and the software analyses GST data and automatically checks truck numbers mentioned in invoices against information available through FASTag records and vehicle registration databases.
Officials explained that if trucks shown on invoices do not actually travel or cross toll plazas, the system raises an alert, it also tracks newly registered companies that suddenly report business worth crores of rupees within a short period and once suspicious refund claims are filed, the AI system prepares a digital map showing the complete chain of linked transactions, helping investigators identify fake billing networks.
The department said this technology played a key role in exposing the alleged tax evasion in Jalandhar and officials also explained how such frauds are carried out in the scrap business, scrap is often bought and sold in cash without proper invoices however, factories and melting plants require bills for accounting purposes. Investigators said some businesses allegedly purchase scrap without bills at lower prices and later buy fake invoices from shell companies to show legal purchases in their records and since scrap usually does not have a unique identity like a barcode or brand, tracing its exact origin becomes difficult.
The department said the fake billing was allegedly used to claim Input Tax Credit under the GST system and under GST rules, businesses can claim credit for tax paid on inputs, fraudsters allegedly misuse this provision by creating fake invoices without any real movement of goods and then claiming tax benefits from the government.
Officials said AI-based investigations have so far exposed 22 dummy firms in Jalandhar allegedly involved in issuing fake invoices and these firms reportedly showed fake business transactions worth ₹302.35 crore, resulting in an estimated government revenue loss of ₹52.75 crore.
The department has identified several major cases during its investigation and these include the latest Ramsons Corporation case, a scrap syndicate that allegedly operated 12 shell companies to carry out fake transactions worth ₹120 crore and illegally claim refunds of ₹21.60 crore, a Loha Mandi case involving alleged bogus trade worth ₹85 crore and GST evasion of ₹15.30 crore, and another case in which eight firms were found operating from a single room while allegedly issuing fake invoices worth ₹42 crore and claiming fraudulent tax benefits of ₹7.50 crore.
