ED decides to start money laundering probe in GST case involving Gujarat journalist
People familiar with the development said said that a day following the Ahmedabad Police arresting six people including journalist Mahesh Langa in a Goods and Services Tax (GST) case, the Enforcement Directorate (ED) has decided to probe money laundering as it wants to look at a “larger conspiracy” in the matter.
The federal agency has already compiled information about anomalies and is likely to submit an ECIR (Enforcement Case Information Report), ED’s equivalent of a first information report, this week.
“We have evidence that the case of Ahmedabad Crime Branch relates to significant scale discrepancies in claiming and passing on fictitious ITC (input tax credit) via fictitious invoices by more than 220 entities nationwide. These bogus companies established themselves using fake names and documentation, therefore depriving the exchequer leading into crores of cash losses. An ED officer, requested not to be identified, advised a closer examination.
ED entering the inquiry suggests that there may be further raids in the next days and perhaps attachment of questionable properties.
The tax a company pays on any purchase of products and/or services utilized for business is known as input tax credit, or ITC.
Tuesday’s raids by the Ahmedabad Police at fourteen sites in Ahmedabad, Junagadh, Surat, Kheda, and Bhavnagar
On Wednesday a Gujarat court remanded all six defendants to ten days in police prison.
Ajit Rajian, deputy commissioner of police of the Ahmedabad Crime Branch, revealed after Langa’s arrest that during their investigation they discovered the journalist’s wife was the promoter of one firm, accused of generating bogus invoices by falsifying documentation and channeling money.
“The Directorate General of GST Intelligence (DGGI) has laid special emphasis this year to identify and apprehend the masterminds of fake Input Tax Credit (ITC) and disrupting syndicates, operating across the country,” added a second official quoted above.
