The Enforcement Directorate (ED) conducted search operations in West Bengal, Manipur, and Jharkhand regarding a Rs 100-crore fake Input Tax Credit (ITC) fraud. The ED’s Itanagar unit carried out searches on January 20 at 10 locations under the Prevention of Money Laundering Act (PMLA), 2002. The investigation was initiated based on an FIR filed under various sections of the Indian Penal Code in connection with a complaint against M/s Sidhi Vinayak Trade Merchant, Arunachal Pradesh.
The ED’s investigation revealed that the firm issued over 15,000 bogus/fake invoices totaling approximately Rs 658.55 crore within six months. These invoices enabled 58 recipient entities in 11 states to wrongfully avail fake Input Tax Credit amounting to about Rs 99.31 crore during the financial year 2023-24. Entities like Dayal Commercial, Apee Enterprises, Phoenix Hydraulics, Ram Awatar Bansal & Co., and Bhima Shankar Industries in Kolkata were found to be involved in generating bills and passing on fake ITC.
In Manipur, M/s FEMA Marketing showed fictitious turnover and passed on fraudulent ITC to major companies, while in Jharkhand, M/s Mahesh Prasad Gupta admitted to availing fake ITC without providing relevant documents. The entities involved in the scam operated for a short period, issuing bogus invoices to generate fake ITC. The searches uncovered a significant misuse of the GST framework through bogus invoicing, fake e-way bills, and fund transfers.
