₹866 Crore GST Fraud Exposed: Daily Wage Workers' Documents Misused for Fake Firms

1. Background of the Scam

An accountant named Sarbjit Singh from Ludhiana, Punjab, masterminded a large GST scam by fraudulently registering 20 fake companies using identity documents of poor, unemployed individuals and daily wage workers.

2. Exploitation of Vulnerable People

Daily wage workers were offered ₹800/day (higher than usual) to share their PAN, Aadhaar, and bank details.

These individuals were unaware that their identities were being used to set up fraudulent business entities.

3.Creation of Fake Firms and Transactions

The accused registered bogus firms under GST using the collected identity documents.

No actual business was conducted—only fake invoices and e-way bills were generated.

These invoices were used to illegally claim Input Tax Credit (ITC).

4. Financial Impact of the Scam

Fake transactions worth ₹866 crore were reported.

Out of this, fraudulent ITC claimed was ₹157.22 crore, broken down as:

₹45.12 crore in FY 2023–24 (₹249 crore turnover)

₹104.08 crore in FY 2024–25 (₹569.5 crore turnover)

₹8.01 crore in the first 2 months of FY 2025–26

5.Bogus Logistics Operation

One of the fake firms, Maa Durga Road Lines, claimed to transport goods worth ₹168 crore and claimed ₹31 crore in ITC.

In reality, no goods were transported, and e-way bills were completely fabricated.

6. Investigation and Arrests

The scam was uncovered by Punjab’s State Intelligence and Preventive Unit (SIPU).

FIRs were registered, and raids were conducted.

Authorities seized:

₹40 lakh in cash

Fake invoices, blank cheque books, and bank forms

Two people have been arrested, but the main accused Sarbjit Singh is absconding.

7. Government’s Response

Punjab’s Finance Minister Harpal Cheema has assured strict action.

SIPU is being strengthened to identify and stop similar frauds.

A wider investigation is ongoing to detect more such fake ITC scams.