The Central GST (CGST) Commissionerate, Ludhiana, has unearthed a Goods and Services Tax evasion worth ₹8.8 crore involving a metal scrap aggregation firm operating out of Dera Bassi in Punjab. Acting on specific intelligence, CGST officials arrested a partner of the firm for allegedly orchestrating the fraud through fake invoicing and wrongful availing of Input Tax Credit (ITC).
According to officials, the firm had fraudulently claimed ineligible ITC to offset its GST liability, resulting in a substantial loss to the government exchequer. The accused is alleged to have used a web of dubious transactions to create the appearance of legitimate business activity, while actually siphoning off tax revenue.
As part of the investigation, CGST Ludhiana conducted coordinated search operations on December 23, 2025, at multiple premises linked to the firm. During these searches, crucial documents and digital records were seized, which reportedly corroborated the scale of the tax evasion.
Senior CGST officials said the arrest was made after sufficient evidence emerged indicating deliberate misuse of the GST framework. “This was not a case of clerical error but a well-planned attempt to defraud the system by availing ineligible ITC through fraudulent means,” an official said.
The investigation is still underway, with authorities probing the possible involvement of other entities and individuals who may have facilitated or benefited from the fake invoicing network. Officials indicated that further arrests cannot be ruled out as the probe expands.
{{/usCountry}}The investigation is still underway, with authorities probing the possible involvement of other entities and individuals who may have facilitated or benefited from the fake invoicing network. Officials indicated that further arrests cannot be ruled out as the probe expands.
{{/usCountry}}Reiterating its zero-tolerance policy towards tax fraud, the CGST Ludhiana Commissionerate stated that such enforcement actions are aimed at safeguarding government revenue and ensuring a level playing field for honest taxpayers. “We remain committed to detecting and dismantling tax evasion rackets and taking strict action against those abusing the GST system,” the department said.
More details are expected to emerge as the investigation progresses.