GST Fraud: ED raids in multiple cities and uncover GST Fraud of Rs.122 Crore

In an alleged Goods and Services Tax (GST) fraud case, the Enforcement Directorate conducted a series of search operations at 25 various locations throughout Gujarat, Maharashtra, and Karnataka.

Based on a chargesheet submitted by Bhavnagar Police in Gujarat, the central agency accused Mohammad Ejaj Bomar with money laundering in the operation.

Ejaj reportedly used forged invoices totaling more than Rs 1102 crore to avoid paying the Rs.122 crore in GST. According to the chargesheet submitted by the Bavnagar Police, the offenders used 461 bogus firms for this purpose.

Based on FIRs lodged by Bhavnagar Police under different sections of the Indian Penal Code (IPC) against Mohammad Ejaj Bomar and others, the ED has launched a money laundering probe.

The central agencies also searched the homes of those engaged in the preparation of phoney documents on the basis of which fictitious businesses were formed to fraudulently claim the Input Tax Credit.

According to the police chargesheet, the suspects formed the shell businesses using the Aadhar Cards of various people. The police claimed to have discovered papers indicating that the accused utilised forms to dupe persons who sought to alter their phone numbers connected to their Aadhar cards. The accused thereafter utilised those Aadhar cards to get PAN cards and GST registrations.

The official stated, the accused utilised falsified documents to form phoney organisations in order to gain GST registration. Later, on a commission basis, these bogus organisations passed on the claimed Input Tax Credits to recipients by issuing bogus invoices.

Payment for these fictitious invoices was made via banking channels before the money was settled in cash between an operator of a fictitious firm and a beneficiary.

Documents such as the form for changing mobile numbers connected to Aadhar cards, fraudulent bills generated by these fictitious businesses, and digital evidence were confiscated during the investigation under the terms of the PMLA. During the probe, the authorities also confiscated Rs 29 lakh.

An investigation into the incident is continuing.