The Enforcement Directorate has launched a large-scale crackdown across multiple regions, including Jharkhand, Manipur, Kolkata, and several other states, as part of an ongoing investigation into a major fake Input Tax Credit (ITC) scam estimated at around ₹658 crore.
Officials said the agency is conducting coordinated search operations at the premises of various individuals and business entities suspected of playing a role in the alleged tax fraud. The nationwide action is being led by the ED’s Itanagar unit, with active support from local police and enforcement agencies in the concerned states.
Investigators have revealed that the case centres on the creation and utilisation of fraudulent ITC claims generated through fake invoices, without any real movement or supply of goods or services. Such practices result in substantial losses to the government exchequer and are often linked to wider financial crimes, including money laundering, circular trading, and the use of shell companies to disguise illegal transactions.
The probe stems from an FIR registered at the Itanagar Police Station in Arunachal Pradesh, naming Rakesh Sharma and Ashutosh Kumar Jha, along with several unidentified associates. They have been accused of criminal conspiracy involving cheating, forgery, and the use of fabricated documents to illegally claim tax benefits.
According to the complaint, the fraudulent activity was allegedly carried out through M/s Siddhi Vinayak Trade Merchants (GSTIN: 12OZYPS8590C1ZC), a firm that investigators say existed only on paper. The entity is accused of wrongly availing ITC worth ₹99.31 crore by using fake invoices collectively valued at ₹658.55 crore. The scam is believed to involve as many as 58 shell companies operating across different states, which were used to route and layer the bogus transactions.
The Enforcement Directorate is now examining the full extent of the fake ITC network, focusing on how the credits were layered, circulated, and ultimately converted into proceeds of crime. Officials said efforts are underway to trace money trails, identify beneficiaries, and determine the role of intermediaries involved in facilitating the large-scale tax fraud.
