ED Cracks Down on Alleged ₹9.63 Crore GST Fraud Network

The Enforcement Directorate (ED) on Monday conducted searches at multiple locations in Uttar Pradesh and Haryana as part of a money laundering investigation linked to an alleged Goods and Services Tax (GST) fraud involving bogus Input Tax Credit (ITC).

The searches covered nine premises in Muzaffarnagar and Ghaziabad in Uttar Pradesh, besides locations in Faridabad, Haryana, officials said. The action was carried out under provisions of the Prevention of Money Laundering Act (PMLA).

The investigation centres on Jambudwip Exports and Imports, which is suspected of generating and passing fraudulent ITC through fabricated invoices and e-way bills without any actual movement of goods, according to the ED.

The agency alleged that the company used a network of bogus or non-existent entities to execute circular transactions, layer funds and make cash withdrawals. Such transactions were allegedly structured to create the appearance of legitimate business activity while facilitating the wrongful availment and transfer of ITC.

According to the agency, GST authorities have already established fraudulent availment of ₹9.63 crore in ITC, resulting in a corresponding loss to the government exchequer.

The ED's searches were aimed at tracing the proceeds of crime, identifying other individuals or entities that may have benefited from the alleged transactions and recovering documentary and digital evidence connected to the suspected ITC network.

Officials said the searches could help establish the flow of funds and determine whether additional entities or beneficiaries were involved in the alleged fraud.

The company could not be contacted immediately for its response to the ED's action. The investigation is continuing, with the agency examining financial records and other evidence gathered during the searches.

The case highlights the use of fake invoices, e-way bills and layered transactions in GST-related frauds, which can enable businesses to claim tax credits without corresponding genuine trade or movement of goods.