The Enforcement Directorate is likely to probe a case linked to alleged GST evasion linked to online gaming transactions routed via Fino Payments Bank, according to people aware of the development.
The agency has not received the inputs from GST authorities on the matter yet. Once the findings are shared, the ED is expected to investigate the case under Prevention of Money Laundering Act (PMLA) provisions.
Currently, the Directorate General of GST Intelligence (DGGI) Hyderabad is probing the matter. The DGGI may also recommend filing an FIR in case suspicious fund flows linked to gaming transactions are found.The development comes weeks after the arrest of Fino Payments Bank CEO Rishi Gupta allegedly linked to the case.
NDTV Profit earlier reported that the initial findings of the investigation hinted at GST evasion of up to several crores, with investigators uncovering a network of shell and non-existent entities, who allegedly used to route funds generated through online money gaming activities.
Several payment aggregators have also been a party to the trail, while the illicit proceeds allegedly funnelled through layered transactions to mask the origin of funds. The probe also indicated the involvement of Gupta, suspected to have enabled the movement of funds connected to the gaming operations.
Additionally, the authorities are looking at financial flows, digital transaction trails and the role of intermediaries, which indicates a broader crackdown on tax evasion linked to online gaming platforms violating regulations. Fino Payments Bank, in an earlier exchange filing, said that the ongoing GST probe is directed at a program manager associated with multiple banks instead of Fino Payments Bank itself.
It also highlighted that neither the institution nor its officials have anything to do with the actions, operations or alleged misconduct of the program manager. However, the lender informed that it does not foresee any financial liability originating from the current GST investigation.
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