The Enforcement Directorate (ED) searched nine premises in Uttar Pradesh and Haryana in a money laundering case linked to fraudulent Input Tax Credit (ITC) worth crores, involving bogus invoices and non-existent entities to cause loss to the exchequer.
ED Raids Nine Premises in ITC Fraud Case
The Enforcement Directorate (ED) on Monday conducted searches at nine premises across Uttar Pradesh and Haryana in connection with a case involving the alleged fraudulent availment and passing of bogus Input Tax Credit (ITC), officials said.
The searches are being carried out by the ED's Lucknow Zonal Office at premises in Muzaffarnagar and Ghaziabad in Uttar Pradesh and Faridabad in Haryana under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The operation was launched early Monday in connection with a case linked to an import-export company allegedly involved in generating and passing on bogus ITC through fabricated invoices and e-way bills without any actual movement of goods.
Modus Operandi and Financial Impact
According to officials, the investigation has revealed a network involving extensive circular transactions, rapid layering of funds and cash withdrawals through multiple bogus and non-existent entities.
The alleged modus operandi involved the use of fabricated documentation to create the appearance of genuine business transactions and facilitate the availment and transfer of ITC, despite there being no corresponding movement of goods.
GST authorities have established fraudulent availment of ₹9.63 crore in ITC and passing on of another ₹10.28 crore in ITC, officials said. The alleged transactions resulted in wrongful loss to the government exchequer.
Investigation Focus and Objectives
The ED has treated the proceeds generated through the alleged fraudulent activities as proceeds of crime under the PMLA.
During Monday's searches, ED teams are examining financial records and other material to trace the alleged proceeds of crime and establish the complete money trail.
The agency is also looking into the role of other entities and individuals who may have benefited from or facilitated the alleged ITC fraud.
Officials said the searches are aimed at identifying further beneficiaries and unearthing documentary and digital evidence relating to the suspected fraudulent ITC network.
The investigation is also expected to establish how the funds were layered through various entities and subsequently withdrawn or transferred.
The ED action follows the findings of GST authorities regarding the alleged fraudulent ITC transactions and forms part of the agency's probe into the money-laundering aspects of the case. Further investigation is underway, officials said. (ANI)
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