ED Cracks Down on Fake GST Entity Network in Gujarat

The Enforcement Directorate executed searches in Ahmedabad, Surat, and Bhavnagar concerning a money laundering case involving Dhruvi Enterprises. The investigation arose from an FIR revealing the creation of fraudulent entities exploiting GST credits without real transactions. Over 200 shell companies are suspected in the extensive criminal network identified.

The Enforcement Directorate (ED) has launched a series of search operations across seven locations in Ahmedabad, Surat, and Bhavnagar, targeting Dhruvi Enterprises in a high-profile money laundering investigation. The action, carried out on October 27, stems from an FIR filed by the Crime Branch Police after a complaint from the Directorate General of GST Intelligence (DGGI).

The complaint alleges that Dhruvi Enterprises obtained GST registrations using falsified documents and issued invoices through 12 different shell entities, including one named DA Enterprises. These entities purportedly claimed fraudulent Input Tax Credit (ITC) from the GST Department, implicating over 200 shell companies orchestrated by organized criminals to pass off bogus invoices without any actual goods or services.

Investigations revealed that Mahesh Langa, a key figure associated with DA Enterprises, managed various operations from premises where police discovered a significant cache of unaccounted cash. Multiple benami transactions are believed to involve shell companies, prompting further probes. ED's crackdown includes searches at 23 locations, aiming to dismantle the complex fraud network, with investigations ongoing under PMLA, 2002.

(With inputs from agencies.)