ED Busts Rs. 700 Crore Fake ITC Scam: Fake Firms, Bogus Invoices, and GST Misuse Exposed
The Enforcement Directorate (ED), Itanagar, has uncovered a massive Input Tax Credit (ITC) fraud worth approximately Rs. 700 crore. In relation to this fraud, ED conducted an investigation across various states on September 11, 2025.
According to the sources, Vinardh Automobiles has admitted to demonstrating a fake turnover of Rs. 110 crore in the financial years 2022-23 and 2023-24. The company made bogus records of vehicle production and sales using fake bills. With these, they wrongly claimed GST refunds. The money was then taken out and shared among the company’s owners, suppliers, and middlemen.
In the context of the multi-crore fake ITC fraud under the Prevention of Money Laundering Act, ED conducted searches across 10 locations in Arunachal Pradesh, Delhi, Haryana, Tamil Nadu, and Telangana. This case started when a complaint was registered against Amit Traders, Guwahati; when investigated, no such company was located at its registered address. Meaning, the company was fake.
Investigation indicated that the firm showed fake purchases, used fake input tax credits (ITC), and was associated with Shree Ram Enterprises, which also claimed fake ITC of Rs. 116 crore using false invoices worth about Rs. 700 crore. In addition to this, the search revealed several other key frauds relating to fake ITC. In Arunachal Pradesh, the owner of the Rainbow Enterprises and AK Enterprises admitted to claiming bogus ITC worth more than Rs. 2 crore; no actual supply and transfer of goods took place.
Similarly, there was another entity named Tanor Engineering, alleged to have claimed bogus ITC of approximately Rs. 4 crore. Fake e-way bills and kickbacks were also detected by the officials. In conclusion to the exposé, ED froze property of Rs. 3 crore and bank accounts with Rs. 36 lakh and also confiscated immovable property documents.
The Enforcement Directorate (ED), Itanagar, said, “In Haryana, Jai Shree Balaji Traders and Jai Shree Balaji Trading Co. declared fictitious turnovers of Rs. 87 crore and Rs. 62 crore, respectively, passing on fraudulent ITC to leading multinational companies, underscoring the scale of misuse of the GST framework. In Delhi, Prisha Exim reported a turnover of Rs. 200 crore in recent years, with its partners claiming little knowledge of transactions conducted in its name, indicating the use of dummy entities.”
Further said, “The primary investigation reveals that fake ITC has been passed on to major genuine multinational companies, and detailed investigations are ongoing.” Officials recovered records that showed a planned misuse of the GST system using fake invoices, false e-way bills, and complex money transfers.
