The Enforcement Directorate (ED) has attached 10 immovable properties, worth Rs 15.41 crore in Kolkata and Howrah as part of its investigation into a goods and services tax (GST) fraud that spans three states and involves 135 shell companies.
The properties, attached under the Prevention of Money Laundering Act (PMLA), belong to Amit Gupta, one of the masterminds of the GST fraud syndicate, and his associates, the agency, which investigates money laundering and other financial crimes, said on September 30. The properties were seized a day earlier.
The investigation, launched on the complaint of the Directorate General of GST Intelligence (DGGI), Jamshedpur, found that the accused orchestrated a sophisticated fraud through a network of 135 shell companies operating in Jharkhand, West Bengal and Delhi.
“The syndicate issued bogus GST invoices without any actual supply of goods, fraudulently generating and passing on fake input tax credit (ITC) valued at over Rs 734 crore,” the ED said.
“This fraudulent ITC was then sold for a commission to various end-user entities, which used the illicit credit to evade their legitimate GST liabilities, causing a massive loss to the government exchequer.”
The fraud exploited the ITC mechanism under the GST system. Under GST rules, businesses can claim credit for taxes paid on purchases against their GST liability on sales.
The syndicate created and operated multiple shell companies to issue fake invoices without supplying any goods.
End-user businesses then used the bogus ITC to reduce their GST liabilities. By charging a commission for these fake credits, the syndicate laundered money and caused a significant loss to the exchequer.
The agency said the syndicate earned a commission of around Rs 67 crore.
Gupta, described as the primary financial manager of the syndicate, allegedly laundered these illicit earnings by acquiring multiple immovable properties.
He tried to conceal these assets by transferring them to relatives and associates after the DGGI initiated its investigation, the ED said.
Search operations on May 8 led to the arrest of key accused, including Gupta, Shiva Kumar Deora, Mohit Deora, and Amit Agarwal, who are now in judicial custody.
A complaint has already been filed before the Special PMLA Court in Ranchi, which has taken cognisance of the offences.
This is not the first time that properties have been attached in the case.
A July 3 order led to the attachment of Rs 5.29- crore worth of properties belonging to alleged syndicate head Deora.
“The present attachment of properties worth Rs 15.41 crore is part of ongoing efforts to trace and attach the proceeds of crime,” the ED said.
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