ED Raids Across Five States in Rs 650 Crore Fake ITC Scam
The ED has not officially disclosed the identities of the key accused yet, as the investigation is ongoing.
NEWS DESK- The Enforcement Directorate (ED) launched raids across Arunachal Pradesh, Haryana, Delhi, Tamil Nadu, and Telangana in a suspected ₹650 crore fake Input Tax Credit (ITC) scam. The ED has not officially disclosed the identities of the key accused yet, as the investigation is ongoing.
The case, probed under the Prevention of Money Laundering Act (PMLA), exposes how shell companies and bogus invoices were allegedly used to siphon off massive sums through fraudulent tax credits.
This development marks one of the biggest enforcement actions against GST-related fraud in recent years, sending shockwaves through the business community and highlighting the government’s renewed focus on financial transparency.
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According to officials, the scam involved the creation of multiple fictitious firms that issued invoices without any actual supply of goods or services. These bogus invoices were then used by businesses to illegally claim ITC, resulting in a direct loss to the government exchequer.
The ED suspects that the proceeds of this scam were laundered through complex financial channels. Funds allegedly flowed through multiple bank accounts, investments, and real estate, making it harder to trace the illicit money trail.
According to media report, Raids were conducted with assistance from state police and GST authorities. Incriminating documents, laptops, mobile devices, and financial records seized and accounts linked to the accused may be frozen or attached, pending further investigation.
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A scam of this scale directly impacts public finances. Experts estimate that fraudulent ITC claims of ₹650 crore could severely disrupt GST collections and increase fiscal pressure.
Such rackets not only cause financial losses but also weaken taxpayer confidence in the GST regime, which was designed to simplify India’s tax structure.
While fraudulent entities exploit loopholes, legitimate businesses face stricter compliance measures and tighter scrutiny, adding to their operational burden.
Tax professionals and economists have welcomed the ED’s action, stressing the need for robust checks to prevent misuse.
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“Fake ITC scams erode public trust and drain resources that could be used for welfare. Strong enforcement ensures fair play and strengthens India’s taxation system,” said a New Delhi-based chartered accountant.
The ED is expected to summon key individuals linked to the shell companies. If evidence confirms money laundering, the accused could face prosecution under PMLA.
Parallel probes by GST authorities aim to track down businesses that benefitted from the scam. Properties, bank accounts, and other assets may be attached or seized during the legal proceedings.
The ED’s action against the ₹650 crore fake ITC scam underscores the government’s determination to curb tax fraud and money laundering. While the investigation is still unfolding, it already highlights the need for stricter compliance, better invoice tracking, and cross-agency coordination.
