The Enforcement Directorate (ED) on Thursday launched extensive search operations across Arunachal Pradesh, Haryana, Delhi, Tamil Nadu and Telangana in connection with a massive Rs 650 crore fake ITC scam, officials confirmed.
The raids, led by ED's Guwahati unit in coordination with state police forces, began early morning and targeted multiple individuals and firms suspected of generating and availing fraudulent ITC through fake invoices without actual supply of goods or services.
Fraudulent ITC: A Major Drain on Exchequer
Investigators revealed that the scam revolves around the creation of shell firms and bogus transactions, enabling illegal claims of ITC. Such fraudulent practices not only cause huge revenue losses to the government but are also often linked to money laundering networks.
The searches are being carried out under the Prevention of Money Laundering Act (PMLA), based on intelligence inputs from GST authorities. Officials noted that the operation seeks to unearth the larger syndicate, track the money trail, and identify the ultimate beneficiaries of the scam.
A Pattern of Fake ITC Rackets
This crackdown comes just weeks after the ED raided 12 locations across Jharkhand, West Bengal and Maharashtra in a similar Rs 750 crore ITC fraud. That case was linked to shell companies and illegal financial channels, with alleged mastermind Shiva Kumar Deora arrested in May 2025 and later charge-sheeted. His interrogation reportedly provided leads about a wider nexus of operators, pointing to further fraudulent networks.
Why This Matters
Fake ITC rackets have become a recurring challenge for enforcement agencies, distorting the GST system, enabling tax evasion, and causing massive financial losses. The ED's coordinated raids highlight the Centre's aggressive stance against white-collar economic crimes, particularly those exploiting tax credit loopholes.
Officials said Thursday's crackdown is expected to uncover key evidence that could lead to further arrests in the coming weeks.
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