Whalesbook
Widespread Raids Target Major GST Fraud
Enforcement Directorate (ED) officials have launched extensive searches across West Bengal, Jharkhand, and Manipur. These coordinated actions aim to unravel a sophisticated ₹658 crore fake Goods and Services Tax (GST) input tax credit (ITC) scheme. The investigation stems from an FIR lodged by the Anti-Evasion Wing of the CGST Commissionerate in Itanagar, Arunachal Pradesh.
Fictitious Firm Behind ₹99 Crore Loss
The central figure in the alleged scam is Siddhi Vinayak Trade Merchants, a firm identified as entirely fictitious. This entity is accused of generating fraudulent invoices totaling over ₹658 crore. This generated a substantial loss of approximately ₹99 crore to the government through illicit input tax credit claims. The ITC mechanism, designed to allow businesses to offset taxes paid on purchases, was deliberately exploited.
Shell Entities and Suspects Scrutinized
Beyond the primary non-existent firm, investigators have uncovered 58 additional shell entities operating across various states. These entities are under suspicion for their potential role in siphoning off laundered money. Siddhi Vinayak Trade Merchants reportedly obtained its GST registration through forged documents, including rent agreements and identity proofs. Rakesh Sharma and Ashutosh Kumar Jha are named as individuals who allegedly availed fraudulent ITC through these fake invoices without any actual supply of goods or services. The investigation also references the late Chartered Accountant Asish Jha and businessman Faiz Ahmed.
Escalating Crackdown on Tax Evasion
These raids occur amidst a broader government offensive against financial crimes. In the financial year up to October 2025, nearly ₹41,664 crore in fake invoice cases were detected. For FY25-26, authorities identified 25,009 shell firms involved in a ₹61,545 crore fraudulent ITC scam. The ED's actions signal a determined effort to curb tax evasion and maintain financial integrity.