ED raids 9 locations across UP, Haryana in Rs 10.28 crore fake income tax credit case
The Directorate of Enforcement (ED) on Monday, August 24, carried out searches at nine locations in Uttar Pradesh and Haryana as part of a money laundering investigation linked to an alleged bogus Input Tax Credit (ITC) case.
The searches were conducted by the ED’s Lucknow Zonal Office at premises in Muzaffarnagar and Ghaziabad in Uttar Pradesh and Faridabad in Haryana.
According to officials, the action was taken under the Prevention of Money Laundering Act (PMLA), 2002. The investigation is related to an alleged network that used fake invoices and E-way bills to claim and transfer fraudulent ITC without the actual movement of goods.
The case pertains to M/s Jambudwip Exports & Imports Ltd., an entity allegedly involved in creating and circulating bogus ITC using fake documentation, the officials said.
Investigators suspect the company and associated entities generated and passed on fraudulent tax credit despite no genuine movement of goods corresponding to the invoices and E-way bills.
Investigation revealed extensive circular transactions, rapid layering of funds and cash withdrawals through multiple bogus/non-existent entities, they said.
Officials said the investigation also found that funds were allegedly withdrawn in cash through multiple bogus or non-existent entities, further indicating the suspected use of shell entities for routing and layering the proceeds generated through the fraudulent ITC transactions.
"GST authorities have established fraudulent availment of Rs 9.63 crore ITC and passing on of Rs 10.28 crore ITC, resulting in wrongful loss to the Government exchequer which constitutes proceeds of crime under PMLA," the officials said.
The ED's searches are aimed at tracing the alleged proceeds of crime generated through the fraudulent ITC transactions and identifying individuals and entities that may have benefited from the suspected network.
The agency is also looking for documentary and digital evidence that could help investigators establish the complete structure of the alleged fraudulent ITC network and determine the role of various entities and beneficiaries involved in the transactions.
Rs 185 crore tax evasion detected in pan masala
Last week, the Directorate General of GST Intelligence (DGGI) disclosed an illegal manufacturing operation involving pan masala, scented jarda and gutkha across six premises in Uttar Pradesh's Chitrakoot and Banda districts, according to an official statement on Friday, August 21.
27 undeclared pouch-packing machines detected
The searches led to the detection of 27 undeclared pouch-packing machines comprising six machines for scented jarda, nine for pan masala and 12 for dohara/desi gutkha. Mixing, areca nut crushing and drying machines were also found. The operation also resulted in the seizure of 15,50,922 pouches of finished goods, comprising pan masala, chewing tobacco, scented jarda and sugandhit supari.
