NEW DELHI: The Enforcement Directorate (ED) on Tuesday conducted raids in multiple states in connection with an alleged fake GST input tax credit (ITC) case involving Rs 658 crore that originated in Arunachal Pradesh, the agency said.
ED officials said searches were carried out at several premises linked to individuals and companies connected to the case in Jharkhand, West Bengal and Manipur. The searches are part of a money laundering investigation being conducted under the provisions of the Prevention of Money Laundering Act (PMLA).
The operation is being led by ED teams from Arunachal Pradesh in coordination with various state police forces.
The money laundering probe is based on an FIR registered by the Itanagar Police, which alleged that individuals identified as Rakesh Sharma and Ashutosh Kumar Jha availed “fraudulent” ITC using fake invoices without any actual supply of goods or services.
According to the agency, a “non-existent” firm named Siddhi Vinayak Trade Merchants is at the centre of the case. The firm allegedly availed ITC worth Rs 99.31 crore using bogus invoices valued at Rs 658.55 crore. The ED is also investigating the role of 58 shell entities spread across different states.
ITC is a legal mechanism under the Goods and Services Tax system that allows businesses to reduce their tax liability by claiming credit for GST paid on business-related purchases.
The agency said it is probing further layering of fake ITC claims and tracing the proceeds of crime generated through the alleged fraud. “Further investigation is under progress,” the ED said, adding that searches are still underway and incriminating documents related to the case have been seized.