The Enforcement Directorate on Tuesday conducted multi-state searches in connection with an alleged fake GST input tax credit case of Rs 658 crore that originated in Arunachal Pradesh, officials said.
Multiple premises of individuals and companies linked to the case located in Jharkhand, West Bengal and Manipur are being searched as part of an investigation being undertaken as per the provisions of the Prevention of Money Laundering Act (PMLA), they said.
Input Tax Credit (ITC) is a legal mechanism in the Goods and Services Tax (GST) system that allows business entities to reduce their tax liability by claiming credits on GST paid for business-related purchases.
The ED Itanagar office in Arunachal Pradesh is conducting the operation in coordination with various state police forces.
The money laundering case stems from an FIR of Itanagar Police where it was alleged that individuals named Rakesh Sharma and Ashutosh Kumar Jha availed “fraudulent” ITC through fake invoices without any actual supply of goods or services.
A “non existent” company named Siddhi Vinayak Trade Merchants, where ITC of Rs 99.31 crore was availed on the strength of bogus invoices valued at 658.55 crore, and 58 shell entities spread across different states are under the scanner of the ED.
