CHANDIGARH, May 9 -- The Punjab taxation department has busted an alleged fake billing and GST fraud racket involving bogus transactions worth Rs.85.4 crore and arrested a Ludhiana-based businessman accused of wrongfully availing fake input tax credit (ITC) of Rs.15.56 crore.

Announcing the crackdown on Friday, finance minister Harpal Singh Cheema said the State Intelligence and Preventive Unit (SIPU) arrested Paramjeet Singh, director and authorised signatory of M/s API Plastic Recyclers Private Limited, Ludhiana, following an investigation into alleged tax evasion and fraudulent billing practices.

He said the firm allegedly generated fake ITC using bogus invoices issued by non-existent and non-functional firms across several states wi...