The Enforcement Directorate, Itanagar, conducted search operations across multiple states, including Telangana, on Sept 11, uncovering an Input tax credit (ITC) fraud worth approximately Rs. 700 crore.
According to the ED’s Hyderabad office, Vinardh Automobiles admitted to projecting a fake turnover of Rs. 110 crore during FY 2022-23 and 2023-24. The company fabricated records of vehicle manufacturing and sales using bogus invoices to fraudulently claim GST refunds, which were then siphoned off and distributed among promoters, suppliers, and professional facilitators.
The searches covered 10 premises across Arunachal Pradesh, Delhi, Haryana, Tamil Nadu, and Telangana in connection with a multi-crore fake ITC fraud under the Prevention of Money Laundering Act. The case originated from a compliant against Amit Traders, Guwahati, which was found to be non-existent at its registered address.
Investigations revealed that the firm fraudulently reported purchases, passed on fake ITC, and was linked to Shree Ram Enterprises, which itself claimed fake ITC of Rs. 116 crore through bogus invoices worth nearly Rs. 700 crore.
The searches uncovered several significant frauds. In Arunachal Pradesh, the proprietors of Rainbow Enterprises and AK Enterprises admitted to availing fake ITC of over Rs. 2 crore each without any actual supply or movement of goods.
Another entity, Tenor Engineering, was found to have obtained fake ITC of Rs. 4 crore. The agency froze property worth Rs. 3 crore and bank balances of Rs. 36 lakh. Fake e-way bills and kickbacks to officials were also detected.
The ED said, “In Haryana, Jai Shree Balaji Traders and Jai Shree Balaji Trading Co declared fictitious turnovers of Rs, 87 crore and 62 crore respectively, passing on fraudulent ITC to leading multinational companies, underscoring the scale of misuse of the GST framework. In Delhi, Prisha Exim reported a turnover of Rs. 200 crore in recent years, with its partners claiming little knowledge of transactions conducted in its name, indicating the use of dummy entities.”
The searched led to the freezing of bank accounts, seizure of immovable property documents, and recovery of records that exposed systematic misuse of the GST mechanism through bogus invoicing, fake e-way bills, and layered fund transfers.
The ED further said, “The primary investigation reveals that fake ITC has been passed on to major genuine multinational companies, and detailed investigations are ongoing.”
Source: The Times of India
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