In a significant move to institutionalise tax enforcement, Punjab Finance, Planning, Excise and Taxation Minister Advocate Harpal Singh Cheema on Monday announced the proposal to establish a State-Level Special Fraud Detection Unit (SFDU) headquartered at Patiala. He said that this dedicated unit will streamline the detection and bring consistency in investigating complex cases involving Goods and Services Tax (GST) violations.
Revealing further, Finance Minister Harpal Singh Cheema elaborated that the SFDU will be tasked with uncovering and probing high-value GST frauds, with particular focus on breaking down circular trading operations, unearthing benami (anonymous) transactions, and eliminating the practice of fake invoicing. “The unit will be empowered to initiate stringent enforcement actions, including cancellation of suspicious GST Identification Numbers (GSTINs), blocking wrongful claims of Input Tax Credit (ITC), and recommending prosecution against offenders to uphold legal accountability”, he added.
Finance Minister Harpal Singh Cheema highlighted that the SFDU will leverage advanced technologies, including Artificial Intelligence (AI), data analytics, and centralised backend operations, to enhance its detection capabilities. The Unit will conduct comprehensive data mining and pattern recognition across the state to identify anomalies in tax returns, transaction networks, and goods movement. The Finance Minister further added that the Unit will use data-driven red flags to selectively verify only dubious or miscreant taxpayers, protecting honest taxpayers from unnecessary scrutiny. This strategic approach, Cheema emphasised, aims to strike a balance between effective enforcement and taxpayer facilitation, ensuring a more efficient and taxpayer-friendly administration
Detailing the composition of the SFDU, Cheema stated that the unit will comprise a multidisciplinary team consisting of experienced tax officers, skilled IT professionals, a Chartered Accountant, and a legal officer. He said that this team will be equipped with real-time access to critical datasets such as GSTN information, e-way bill tracking, toll records, and RFID trail analytics, enabling prompt and precise action against tax evasion.
Finance Minister Harpal Singh Cheema informed that the Special Fraud Detection Unit (SFDU) will be empowered by robust legal provisions under Sections 67, 70, 74, and 132 of the CGST/PGST Acts, complemented by relevant sections of the Indian Penal Code (IPC). He said that this will enable the SFDU to function as a technologically advanced, intelligence-driven enforcement agency. “This initiative marks a decisive step toward safeguarding the state’s revenue and dismantling elaborate tax fraud networks that threaten economic integrity”, said Cheema.
Emphasising that the establishment of the Special Fraud Detection Unit (SFDU) underscores AAP led Punjab Government’s firm resolve to cultivate a tax environment that is not only more accountable and transparent but also resilient to fraudulent activities, Finance Minister Harpal Singh Cheema said that the SFDU will play a pivotal role in safeguarding the state’s revenue and promoting a culture of compliance by taking proactive measures to detect and prevent tax evasion, ultimately contributing to the state’s economic stability and growth.
