ED Arrests Two in Rs 734 Crore Fake GST ITC Fraud Case Involving 135 Bogus Firms:

In connection with a probe ongoing into a Goods and Services Tax (GST) Input Tax Credit (ITC) fraud, the Enforcement Directorate (ED) Ranchi Zonal Office has apprehended two individuals for generating and passing fraudulent ITC.

The ED in the present case had initiated an investigation following the filing of several grievances by the Directorate General of GST Intelligence (DGGI), Jamshedpur.

The investigation unveiled that the syndicate had created a web of 135 bogus companies which did not exist in reality but merely existed on paper. These companies were used to issue bogus invoices worth over Rs 5,000 crore without any actual supply of goods or services.

The accused have been identified as Gyaan Chand Jaiswal, alias Babloo Jaiswal, and Raaj Jaiswal. They both were nabbed after a search and seizure operation held on September 30, 2026, under Section 19 of the Prevention of Money Laundering Act, 2002, and thereafter, they were produced before the Special PMLA Court, Ranchi, on October 01, 2026. The court has remanded them to judicial custody.

The Enforcement Directorate (ED) has officially stated that "through this modus operandi, the syndicate fraudulently generated and passed on fake ITC to the tune of over Rs 734 crore. This illicitly generated credit was then sold at a commission to various beneficiary firms, which used it to evade their own GST liabilities."

Search was conducted at four locations linked to Gyaan Chand Jaiswal and Sanjay Parekh (CA) and others in Jamshedpur, Jharkhand and Kolkata in West Bengal. The agency said, "they not only incorporated entities in their and family members' names, Maa Sharda Endeavours Pvt Ltd, Makers Casting Pvt Ltd and Kedarnath Trexim Pvt Ltd, but also in the name of their employees, such as Jai Bhole Enterprises."

The agency further stated, "The investigation found that fake ITC to the tune of Rs 54.33 crores were routed through the said entities and was layered ultimately into their personal bank accounts as well as the bank accounts of their relatives and entities, which is PoC attributed to them, and the said PoC was suspected to have been utilised towards their business activities and in acquisition of various movable and immovable properties."