Ludhiana, September 10
The World MSME Forum has urged Union Finance Minister Nirmala Sitharaman to order an independent, time-bound investigation into alleged large-scale irregularities in the Punjab SGST Department. Forum President Badish Jindal, in a detailed representation, warned that the matter involves not just tax assessment but possible organised GST fraud, shell entities, fraudulent Input Tax Credit (ITC), misuse of statutory powers and suppression of information.
Jindal cited multiple cases already exposed by Central agencies, including illegal sales worth ₹647.4 crore in Mandi Gobindgarh, fake invoicing of ₹258.5 crore, and fraudulent ITC networks involving hundreds of crores. He pointed out that CGST Ludhiana alone booked 296 cases of GST evasion worth ₹1,662 crore in FY 2025-26, while DGGI Ludhiana uncovered inter-state fake billing of ₹87.91 crore. “The seriousness of GST fraud in Punjab cannot be dismissed as an isolated allegation,” he said.
The Forum has raised alarm over the extraordinary scale of suo-motu GST registration cancellations by certain SGST offices. Government data shows 84,101 cancellations in Punjab between FY 2021-22 and the first quarter of FY 2024-25. RTI compilations reveal thousands of cancellations in offices such as Amritsar-1, Ludhiana-5, Bathinda and Jalandhar, while several offices refused to provide information. Jindal stressed that some officers reportedly cancelled more than 1,000 registrations, with cases where nearly 90% of an office’s registrations were cancelled by a single official.
The Forum also highlighted complaints about middlemen operating around GST offices, alleged export scams, and companies created in the names of unsuspecting individuals. It demanded CCTV verification of suspected interactions and scrutiny of unexplained assets. Jindal further pointed to Punjab’s widening revenue gap compared to neighbouring states, noting that while Haryana’s GST collections reached ₹1,21,080 crore in FY 2025-26, Punjab’s stood at only ₹27,642 crore.
Another concern is that genuine businesses are being penalised for fraudulent transactions carried out by bogus suppliers. “Investigators must trace the entire transaction chain rather than stopping at nominal GST registration holders,” Jindal said, adding that bogus billing in Punjab may exceed ₹2 lakh crore, though this figure requires reconciliation with official records.
The Forum has demanded a forensic audit of all suo-motu cancellations, reconciliation of SGST, CGST and DGGI databases, and impartial investigation into possible collusion by officials. “GST was introduced to create a transparent, technology-driven tax system. The objective must be to identify the truth, recover every rupee of government revenue, punish the actual beneficiaries and protect every honest industrialist wrongly targeted,” Jindal emphasised.He concluded that the investigation should be time-bound, comprehensive and aimed at restoring credibility to the GST system while safeguarding genuine taxpayers.