In a major step towards strengthening tax enforcement in Punjab, Finance Minister Harpal Singh Cheema on Monday announced the establishment of a State-Level Special Fraud Detection Unit (SFDU), which will be based in Patiala.
Cheema stated that the SFDU is being set up to streamline the detection and investigation of complex cases related to Goods and Services Tax (GST) violations. The specialised unit will focus on uncovering large-scale GST frauds, particularly targeting circular trading schemes, benami (anonymous) transactions, and fake invoicing practices.
“This dedicated unit will have the authority to take strict enforcement actions, such as cancelling suspicious GST Identification Numbers (GSTINs), blocking illegitimate Input Tax Credit (ITC) claims, and recommending prosecution against violators to ensure legal accountability,” Cheema said.
He further highlighted that the SFDU will harness advanced technologies including Artificial Intelligence (AI), data analytics, and centralised backend systems to improve its detection capabilities. The unit will conduct detailed data mining and pattern analysis across the state to identify irregularities in tax filings, transactional networks, and the movement of goods.
Cheema stressed that the unit’s operations will be targeted and evidence-based. By flagging only questionable taxpayers using data-driven indicators, the SFDU aims to shield honest businesses from unnecessary inspections. The initiative, he noted, seeks to balance robust enforcement with taxpayer convenience, thereby fostering a more efficient and taxpayer-friendly environment.
The SFDU will consist of a multidisciplinary team comprising experienced tax officers, IT experts, a Chartered Accountant, and a legal officer. This team will have real-time access to crucial data sources, including GSTN records, e-way bills, toll data, and RFID-based movement analytics, allowing for swift and accurate interventions.
Cheema also confirmed that the unit will operate under strong legal provisions drawn from Sections 67, 70, 74, and 132 of the CGST/PGST Acts, along with applicable sections of the Indian Penal Code (IPC), enabling it to function as a technologically advanced and intelligence-led enforcement agency.
Calling it a “decisive step” in protecting the state’s financial interests, Cheema said the SFDU reflects the AAP-led Punjab Government’s commitment to fostering a transparent and accountable tax regime. He added that the new unit will play a crucial role in dismantling tax fraud networks and promoting a culture of compliance, ultimately contributing to the economic health and stability of the state.
