Enforcement Directorate Cracks Down on Rs 650 Crore Fake ITC Scam Across Five States

In a sweeping crackdown, the Enforcement Directorate (ED) launched search operations on Thursday across Arunachal Pradesh, Haryana, Delhi, Tamil Nadu, and Telangana, targeting a massive fake Input Tax Credit (ITC) scam valued at approximately Rs 650 crore, according to officials. The searches commenced early Thursday following specific intelligence inputs.

The campaign is orchestrated by the ED's Guwahati unit, which is closely coordinating with various state police forces. This case involves fraudulent activities by firms that allegedly engaged in creating and availing fake ITC through fictitious invoices, absent any actual supply of goods or services. Such activities significantly impact the state exchequer and are frequently linked to broader schemes involving money laundering and shell company operations.

The ED's operations, grounded in the Prevention of Money Laundering Act (PMLA) and supported by data from the Goods and Services Tax (GST) authorities, highlight the persistent threat posed by fake ITC schemes. In related previous investigations, fraudsters have employed multiple shell companies to unlawfully claim tax credits, thereby constructing a false transaction network.

Officials have indicated that these ongoing efforts aim to expose the full extent of the scam and identify the ultimate beneficiaries. Last month, the ED executed similar operations at 12 locations in Jharkhand, West Bengal, and Maharashtra as part of the same extensive investigation into a parallel Rs 750 crore fake ITC fraud connected to shell companies and unauthorized financial conduits.

This investigation traces back to the arrest of Shiva Kumar Deora, deemed the syndicate's mastermind. Deora, apprehended in May 2025 and subsequently chargesheeted, was instrumental in unveiling the involvement of numerous individuals and firms in these money-laundering activities.

(With inputs from agencies.)