Lucknow, August 24: The Enforcement Directorate (ED) conducted raids on Monday at nine locations, including Muzaffarnagar and Ghaziabad in Uttar Pradesh and Faridabad in Haryana. This operation is part of an investigation into an alleged money laundering case linked to fraudulent input tax credit (ITC) claims.
The searches are being carried out under the Prevention of Money Laundering Act (PMLA), 2002. The inquiry focuses on a purported network that generated and passed on fake ITC through bogus invoices and e-way bills, without any actual movement of goods.
Officials have indicated that the case involves Messrs Jambudweep Exports and Imports Limited. This company is accused of using counterfeit documents to create and disseminate bogus ITC.
Investigators suspect that the company and its affiliates generated fraudulent tax credits and transferred them, despite no genuine movement of goods as per the invoices and e-way bills.
The officials revealed that the investigation uncovered large-scale circular transactions, rapid layering of funds, and cash withdrawals through numerous fictitious or non-existent companies.
Moreover, the inquiry has shown that cash was allegedly withdrawn through these bogus entities, suggesting that shell companies were used to launder money obtained from fraudulent ITC transactions.
GST officials have discovered that ₹9.63 crore of ITC was wrongfully claimed, and ₹10.28 crore of ITC was transferred, resulting in significant losses to the government treasury. Under the PMLA, this is classified as proceeds of crime.
The purpose of the ED’s raids is to uncover the alleged illegal earnings from fraudulent ITC transactions and identify individuals and entities that benefited from this suspicious network.
The agency is also seeking documentary and digital evidence to help investigators understand the complete structure of the alleged fraudulent ITC network and determine the roles of various entities involved in the transactions.
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