ED Raids Multiple States in Rs 658 Crore Fake GST Invoice Scam

The Enforcement Directorate (ED), on Tuesday, carried out raids in several states in connection with a GST ITC fraud case worth Rs 658 crore. The scam started in Arunachal Pradesh and involves fake GST bills that were used to wrongly claim input tax credit. The

Authorities are conducting searches at several locations in Jharkhand, West Bengal, and Manipur. These locations belong to people and companies connected to the case. The searches are part of an investigation under the Prevention of Money Laundering Act (PMLA), officials said.

Input Tax Credit (ITC) is an important mechanism under the GST Act, which enables businesses to claim credit for the GST paid on purchases against the GST liability on their sales, preventing the cascading effect.

The ED (Enforcement Directorate) office in Itanagar, Arunachal Pradesh, is carrying out the operation by working together with police teams from different states.

The money laundering case began after Itanagar Police filed a complaint saying that Rakesh Sharma and Ashutosh Kumar Jha took tax benefits illegally. They are accused of using fake bills to claim input tax credit (ITC) even though no real goods or services were actually bought or sold.

A fake company called Siddhi Vinayak Trade Merchants was created. It didn’t actually do real business. Using fake invoices worth Rs 658.55 crore, this company wrongly claimed Rs 99.31 crore in tax credit (ITC). The Enforcement Directorate (ED) is now investigating this network and has identified 58 shell companies operating across multiple states.