GST Evasion: ED Conducts Raids at 25 Locations in Gujarat; Seized Rs.29 Lakhs in Cash

The Directorate of Enforcement (ED) has carried out search operations at 25 locations on 02.06.2023 in Ahmedabad, Gandhinagar, Bhavnagar, Botad, Gandhidham, Mumbai (Maharastra) and Bengaluru (Karnataka) in the case registered against Mohammad Ejaj Bomar & others (GST Fraud case) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. In this search action the premises of accused persons who were involved in preparing bogus documents on the basis of which fake GST firms were made and the entities which were used for providing bogus Input Tax Credit (ITC) were covered.

On the basis of FIRs lodged by Bhavnagar Police for numerous offences punishable under different sections of the IPC, 1860 against Mohammad Ejaj Bomar and others, the ED launched a money laundering probe. Furthermore, according to the police chargesheet, these accused persons altered the cellphone number connected to the Aadhar card of other people in exchange for financial aid under a government initiative, and then used these Aadhar cards to get a PAN and then GST registration. According to the police charge sheet, 461 phoney organisations filed fraudulent invoices totaling more than Rs.1102 crore, involving GST evasion totaling Rs.122 crore.

The accused’s method of operation is to create bogus organisations using fraudulent papers in order to gain GST registration. Later, these fictitious firms pass on Input Tax Credit to recipients by issuing fictitious invoices on a commission basis. Payment for these forged invoices is made through banking channels, and the money is eventually paid in cash between the operator of the forged firm and the beneficiary.

During the course of the search, a large number of incriminating papers, such as forms for changing mobile numbers from Aadhar cards, phoney bills produced by these fictitious businesses, and digital evidences, were confiscated under the provisions of the PMLA, 2002. Additionally, cash in the sum of Rs. 29 lakh was seized during the search.

More research is being conducted.