New Delhi | The Enforcement Directorate (ED) has arrested Punjab Industries Minister Sanjeev Arora in connection with an alleged fake GST and money laundering case involving more than ₹100 crore. According to sources, the action was taken under the Prevention of Money Laundering Act (PMLA). The case revolves around allegations of fake mobile phone purchase invoices, fraudulent Input Tax Credit (ITC) claims, suspicious export transactions and alleged round-tripping of funds through Dubai-based channels. The development has triggered major political and business reactions in Punjab and beyond.
Sources said the ED launched simultaneous search operations on Saturday morning across Chandigarh, Delhi and Gurugram. The agency reportedly raided four key premises linked to the minister and several associated entities. Locations searched included the official residence allotted to him as a minister, corporate offices and properties connected to real estate firm Hampton Sky Realty Limited.
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Investigators allege that large-scale financial irregularities were carried out through fake GST billing linked to mobile phone trading. According to preliminary findings, bogus purchase invoices were allegedly procured from non-existent or shell firms based in Delhi. These invoices were then reportedly used to claim fraudulent input tax credit benefits and export-linked incentives, causing substantial losses to the government exchequer.
The ED also suspects that the alleged network was used for “round-tripping” funds from Dubai into India. Investigators believe export transactions and business operations were used as a cover to circulate the same pool of money through multiple entities and bank accounts before projecting it as legitimate business income. Financial investigators are now examining banking trails, GST filings, shell companies and foreign transaction records to trace the movement of funds.
Sources associated with the probe said fake documentation related to large-scale mobile phone purchases formed a critical part of the alleged scheme. Authorities claim export benefits, GST refunds and duty drawback incentives were obtained using fabricated invoices and questionable trade records. Investigators suspect the alleged network may have facilitated tax evasion and laundering of crores of rupees over an extended period.
Officials linked to the investigation said digital transaction records, banking activity and GST filing data have emerged as key evidence in the case. The ED is also examining the possible involvement of other business entities, intermediaries and financial consultants connected to the transactions. Multiple individuals are likely to be questioned as the probe expands, and agencies have not ruled out the possibility of additional arrests in the coming days.
Financial crime experts believe the case reflects how fake GST networks are increasingly being used not just for tax evasion but also for concealing large-scale money laundering operations. Such networks often rely on shell companies, manipulated invoices and layered banking transactions to disguise the origin of funds and convert illicit money into seemingly legitimate business revenue.
Renowned cyber crime expert and former IPS officer Prof. Triveni Singh said economic fraud networks are becoming far more sophisticated due to the growing misuse of digital financial systems. He said, “Fake invoicing, shell companies and digital banking channels have become major tools for economic offenders. Without real-time analytics, coordinated enforcement and strong data-sharing mechanisms between agencies, such networks can remain active for years without detection.”
Experts further noted that the alleged case may extend beyond simple GST fraud and could involve corporate structuring, fake export operations and international financial routing mechanisms designed to bypass regulatory scrutiny. Cases involving fraudulent tax credits and round-tripping can have serious implications for government revenue collection, financial transparency and the credibility of trade systems.
The ED is currently conducting forensic analysis of digital documents, bank records, GST filings and export transaction data linked to the alleged network. Investigators are also expected to examine overseas financial links and communication records associated with the entities under scrutiny. With the investigation now widening, legal and political developments related to the case are expected to intensify in the coming days.
