The Enforcement Directorate (ED) on Thursday conducted search operations at eight locations across Jharkhand, Kolkata, and Mumbai in connection with a Rs 730 crore fake GST scam. The raids were carried out following "credible evidence" indicating that multiple individuals and firms were involved in laundering the "proceeds of crime" generated through large-scale tax fraud.
The case is linked to a syndicate allegedly led by Shiv Kumar Devda, who, along with associates Mohit Devda, Amit Gupta, and Amit Agarwal, was arrested earlier this year. ED investigations revealed that the group created a network of 135 fake companies - existing only on paper - to issue fraudulent invoices worth over Rs 5,000 crore without any actual supply of goods or services.
Shiv Kumar Devda was charge-sheeted last month after his arrest in May 2025. The current raids mark the second phase of ED's crackdown, following the first round of searches in May.
The magnitude of GST fraud in India remains significant. Minister of State for Finance Pankaj Chaudhary informed Parliament on August 4 that Central GST (CGST) field officers detected tax evasion worth Rs 7.08 lakh crore in the last five years till FY 2024-25, including input tax credit (ITC) fraud of Rs 1.79 lakh crore.
In FY 2024-25 alone, CGST officials detected over Rs 2.23 lakh crore in GST evasion. Out of the 30,056 cases identified, more than half - 15,283 cases - were related to ITC fraud, amounting to Rs 58,772 crore in evaded taxes.
The ED's ongoing probe into the fake GST racket is expected to uncover more shell entities and trace the money trail behind the massive invoice-based fraud.
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