Lucknow: The Directorate of Enforcement (ED), Lucknow Zonal Office, on Monday conducted searches at nine premises spread across Uttar Pradesh’s Muzaffarnagar and Ghaziabad and Haryana’s Faridabad in connection with an alleged money laundering case involving the fraudulent availment and passing of bogus Input Tax Credit (ITC), officials said.
The searches are being carried out under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, as part of an ongoing investigation into an alleged network involved in generating and passing fraudulent ITC through fabricated invoices and E-way bills without any actual movement of goods.
According to officials, the case pertains to M/s Jambudwip Exports & Imports Ltd., an entity allegedly involved in the creation and circulation of bogus ITC using fake documentation.
Investigators suspect that the company and entities associated with it generated and passed on fraudulent tax credit despite there being 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Officials said the investigation also found that funds were allegedly withdrawn in cash through multiple bogus or non-existent entities, further indicating the suspected use of shell entities for routing and layering the proceeds generated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.
Further details in connection with the searches and the investigation are awaited.
