ED raids in UP, Haryana over alleged Rs 10.28-crore tax credit fraud

The Enforcement Directorate on Monday searched nine premises across Uttar Pradesh and Haryana as part of a money-laundering investigation into an alleged network that fraudulently generated and transferred input tax credit worth crores of rupees.

Officials said the searches, conducted by the agency’s Lucknow zonal office under the Prevention of Money Laundering Act, covered properties in Muzaffarnagar and Ghaziabad in Uttar Pradesh and Faridabad in Haryana.

The case concerns Jambudwip Exports & Imports Ltd, which is accused of using fabricated invoices and e-way bills to create and circulate bogus input tax credit without any corresponding movement of goods.

Investigators allegedly uncovered circular transactions, the rapid movement of funds through several accounts and cash withdrawals involving multiple bogus or non-existent entities.

The agency suspects that shell entities were used to route and layer the proceeds generated through the fraudulent transactions before the money was withdrawn in cash.

According to officials, GST authorities established the fraudulent availment of Rs 9.63 crore in input tax credit and the onward transfer of Rs 10.28 crore, causing a loss to the government exchequer. The amount has been treated as proceeds of crime under the PMLA.

The searches are intended to trace the alleged proceeds and identify the individuals and entities that benefited from the network. The ED is also examining documents and digital records to determine the structure of the suspected operation and the roles played by its various participants.

Further details about the searches and the investigation are awaited.

With IANS inputs