ED raids 12 sites in Rs 750 cr fake input tax credit scam across 3 states

Fresh ED raids across Jharkhand, West Bengal, and Maharashtra target shell firms and suspects linked to Rs 750-cr fake input tax credit scam under PMLA investigation

The Enforcement Directorate (ED) on Thursday launched search operations at 12 locations across Jharkhand, West Bengal, and Maharashtra in connection with a Rs 750-crore fake input tax credit (ITC) fraud case, according to sources.

 

The source further said the action is part of an ongoing investigation under the Prevention of Money Laundering Act (PMLA), 2002. 

The case involves large-scale financial irregularities carried out through shell entities and unauthorised financial channels. The probe stems from the arrest of Shiva Kumar Deora, the alleged mastermind behind the syndicate, who was taken into custody in May 2025 and subsequently chargesheeted last month. 

“The fresh round of searches was prompted by credible evidence pointing to the involvement of several other individuals and firms in laundering the proceeds of crime. The operation aims to trace the wider money trail and recover incriminating material linked to the scam,” added the ED source. 

Last month, in July 2025, GST officers uncovered fake input tax credit claims worth Rs 15,851 crore in the April–June quarter of the current financial year, a 29 per cent jump over the year-ago period, even though the number of fake firms detected was lower year-on-year (Y-o-Y), officials said. The total number of fake firms detected by central and state GST officers during the first quarter of FY26 stood at 3,558, compared to 3,840 such entities in the same quarter of FY25. 

 

"On average, about 1,200 fake firms are getting detected every month. The number of fake firm detections in the April–June period is lower compared to last year, which shows that the drive against fake GST registration has worked," an official said.

 

As per data on fake firms and ITC frauds detected by central and state GST officers during the June quarter of FY26, Rs 15,851 crore worth of ITC was found to have been fraudulently passed, involving 3,558 fake firms. During the period, 53 persons were arrested by GST officers and Rs 659 crore was recovered.

 

In a separate action, the ED's Lucknow Zonal Office is conducting search operations at four premises linked to Nikant Jain, who allegedly sought a bribe on behalf of Abhishek Prakash, Indian Administrative Service (IAS), Chief Executive Officer of UP Invest, according to sources.

 

“The locations under search include Jain’s residential house, two other houses registered as offices of companies related to him and his family members, and a commercial building or hotel where his family members are listed as common directors. All the premises are located in Lucknow,” added the ED sources.