A massive case of tax evasion and the generation of fake receipts has come to light. The Amritsar regional unit of the Directorate General of Goods and Services Tax Intelligence (DGGI) has unearthed a scam involving suspicious transactions worth ₹3,742.08 crore and fraudulent Input Tax Credit (tax relief) claims amounting to ₹112.4 crore. The tentacles of this mega-scam extend across Punjab, Chandigarh, and Maharashtra, implicating several prominent bullion traders and dozens of shell (fake) business entities.
Taking strict action on August 25, 2026, the investigative agency issued show-cause notices to a total of 31 individuals and entities linked to this racket. Investigations revealed that this entire fraudulent operation was conducted between the financial years 2020-21 and 2025-26. The mastermind behind the scheme, Divay Mohindru, used his firms—Mahavir Abhushan and Mahadev Bullion—to spin a vast web of fake invoices without any actual purchase or sale of gold. Bullion traders who sold gold for cash in the market heavily utilized the accounts of these shell entities to launder their ‘black money’ (illicit funds) into ‘white money’ (legitimate funds).
Funds were transferred into these accounts via intermediaries, and the cash was returned after deducting a commission. This crackdown has sent shockwaves through the bullion markets of Amritsar, Jalandhar, Ludhiana, and Mumbai. The investigative agency has initiated proceedings to recover the illegally claimed tax credits and impose heavy penalties under Sections 74 and 122 of the Central Goods and Services Tax (CGST) Act.
What are B2B and B2C transactions, and how were they utilized in the scam? B2B (Business-to-Business – a ₹175.38 crore operation): This refers to the sale of goods by one registered business entity to another. In this massive scam, bullion traders (suppliers) utilized this B2B billing mechanism.
They recorded sales of gold worth ₹175.38 crore to the main accused’s firms solely on paper, enabling the transfer of fraudulent ‘Input Tax Credit’ (ITC) to the main accused without actually delivering any physical goods.
B2C (Business-to-Consumer – a ₹3,612.54 crore operation): This refers to the sale of goods by a business directly to a general consumer who does not possess a GST number. To offload the fraudulent ITC, the scammers reported 94% to 99.9% of their total sales as B2C transactions, amounting to a total taxable value of ₹3,612.54 crore. They used the PAN and Aadhaar cards of daily-wage laborers to create fake customer identities, thereby evading detection and laundering black money into white money.
How the entire fraud network operated
Misuse of laborers’ documents: The accused portrayed the massive turnover of their establishments as ‘sales directly to consumers’ (B2C). Investigations revealed that the individuals listed as buyers had never actually purchased any gold. Fake firms and bank accounts were established by misusing the PAN and Aadhaar cards of daily-wage laborers and ordinary citizens.
Misuse of courier networks
Documents claimed that gold was being procured from Mumbai-based importers (suppliers) via private courier services (such as Ambe Express and Sequel Logistics). However, investigations into the courier companies revealed that the parcels never actually reached the main accused. Selected bullion traders from various cities in Punjab were directly receiving these courier packages, and their documents and stamps were being misused.
**Tax exemptions created out of thin air (Fake ITC)**
Ineligible Input Tax Credit (ITC) amounting to ₹112.4 crore was claimed and utilized on a massive scale based solely on fabricated paper bills—without the movement of even a single gram of actual gold.
**Which banks were involved, and what was the scale of the transactions?**
The investigation revealed three key bank accounts (UCO, RBL, and SBI) belonging to the main accused’s firm (Mahavir Abhushan). During the financial years 2020-21 and 2021-22, the combined transactions across these three accounts totaled ₹1,356.72 crore in deposits (credits) and ₹1,354.35 crore in withdrawals (debits).
According to the banks, the precise figures for the transactions (FY 2020-21 and 2021-22) are as follows:
SBI Bank (Civil Lines, Jalandhar): Total Deposits (Credit): ₹736.69 crore | Total Withdrawals (Debit): ₹734.80 crore.
RBL Bank (Model Town, Jalandhar): Total Deposits (Credit): ₹422.91 crore | Total Withdrawals (Debit): ₹422.48 crore.
UCO Bank (Gudmandi, Jalandhar): Total Deposits (Credit): ₹197.12 crore | Total withdrawals (debit): ₹197,07,45,060.
Furthermore, the fake B2C shell companies opened in Punjab extensively utilized various other banks—such as PNB, HDFC, Axis, IndusInd, IDBI, Union Bank, and Yes Bank—for cash transactions.
Prominent figures from Punjab and Mumbai under investigation
Firms based in Jalandhar (Mahavir Abhushans and Mahadev Bullion) owned by the prime accused in this massive scam, Divay Mohindru, are at the center of the case. Additionally, other key traders and entities under investigation include:
Prominent bullion traders (B2B suppliers) from Punjab and Chandigarh:
Amritsar (8 traders): Durga Das Seth Sarraf, Gyan Chand Kapoor Jewellers, Manik & Company, Sahdev Ornaments, T.R. & Sons, SAS Overseas, Raja & Company, Jain Jewellers Registered.
Jalandhar (4 traders): Harshit Jewellers, New Era Diamonds & Jewellery,
