Enforcement Directorate Targets Multi-State GST Fraud
In a sweeping operation against one of India’s largest GST fraud networks, the Enforcement Directorate (ED) launched raids across nine locations in Jharkhand and West Bengal on Thursday morning. The crackdown is linked to an ₹800 crore input tax credit (ITC) scam involving fake GST invoices amounting to over ₹14,325 crore. The operation marks a significant escalation in the probe, especially as it unfolds in Jharkhand for the first time, following earlier actions in Bengal.
CRPF forces were deployed to maintain security during the coordinated raids at business premises in Ranchi, Jamshedpur, and key urban zones in Bengal. Among those under scrutiny are individuals and entities allegedly at the center of this financial racket, including Shivkumar Deora, Sumit Gupta, Amit Gupta, and several undisclosed firms.
The Modus Operandi: Fake Invoices, Real Profits
According to preliminary findings, shell companies were floated using forged documents, which were then used to generate fraudulent GST invoices. These invoices allowed the accused to claim ITC benefits without actual supply of goods or services, creating a shadow economy that siphoned legitimate revenue away from the public exchequer.
Once the false credits were availed and profits secured, these paper-only establishments were abruptly dissolved, leaving minimal trace and shielding the primary beneficiaries. The total scale of fake billing uncovered—₹14,325 crore—signals the deep penetration of such networks into the formal tax system.
Past Precedents: Not the First, But Among the Biggest
This is not the ED’s first foray into massive GST-related crimes. In January 2025, the GST Directorate unearthed a ₹100 crore scam in Sarubadera (Ramgarh) and Jharia (Dhanbad). Soon after, eight locations in Jamshedpur and Adityapur were searched, uncovering an additional ₹150 crore scam linked to companies operating under fake identities.
Several firms, including Khatu Shyam Steel, Jaisuka Iron and Power, Baba Shyam Steel, Shri Steel, Vivan Enterprises, and even hospitality fronts like Rivaah Resort on NH-33, have come under ED’s scanner. Mateshwari Engineering, a manufacturing entity in Adityapur, is also being investigated for possible ties to this GST fraud chain.
While formal statements from the ED are awaited, sources suggest that the network of companies under investigation stretches across multiple sectors—from steel and power to real estate and resorts—indicating a complex, interlinked financial crime operation.
A Test of Enforcement, Trust, and Reform
The current wave of ED raids underscores a deeper rot in India’s indirect taxation ecosystem, where loopholes in GST compliance mechanisms are being systematically exploited. With billions in potential revenue lost, such scams not only impact state and central budgets but also undermine the credibility of India’s tax infrastructure, which was designed for transparency and ease of doing business.
As this investigation unfolds, it raises a crucial question: How resilient are India’s fiscal enforcement agencies in keeping pace with white-collar criminal innovation? The answer lies not just in arrests and asset seizures, but in long-term reform—tightening digital invoice audits, enhancing inter-agency data sharing, and most critically, creating deterrents strong enough to prevent the next ₹800 crore scam.
For now, the spotlight is firmly on Jharkhand and Bengal—but the implications are national.
(With inputs from agencies)
