ED Expands Probe into Massive GST Fraud Involving 200 Shell Entities

The Enforcement Directorate (ED) is investigating over 200 shell entities involved in a GST fraud conspiracy, wherein fraudulent input tax credits worth crores were wrongfully obtained. The probe includes searches across seven Gujarat cities, uncovering an intricate web of deceit linked to Dhruvi Enterprises.

The Enforcement Directorate (ED) has intensified its investigation into a sprawling network of 200 fake and shell companies accused of fraudulently securing and distributing input tax credits amounting to crores of rupees in a GST fraud case against Dhruvi Enterprises and others.

Investigations have revealed the use of common identifiers such as PAN, mobile numbers, and email IDs across 34 GST registrations, further linked to the establishment of an additional 186 registrations, including 50 in Gujarat. This expansion in the probe follows extensive searches by the ED in 23 locations across seven cities in Gujarat, namely Ahmedabad, Bhavnagar, Junagarh, Veraval, Rajkot, Surat, and Kodinar.

The ED's action succeeds a complaint by the Directorate General of GST Intelligence (DGGI) leading to the Gujarat Police registering an FIR. The complaint highlighted the creation of multiple shell entities utilized for fraudulent receipt and distribution of input tax credits backed by fake invoices, a breach falling under the Prevention of Money Laundering Act, 2002.

(With inputs from agencies.)