Nationwide Drive Targets GST Frauds: Over 29,000 Bogus Firms Detected

New Delhi: In a concerted effort to combat frauds in Goods and Services Tax (GST) and enhance compliance, GST formations under the Central Board of Indirect Taxes and Customs (CBIC) and State/UT Governments have initiated a focused drive against non-existent/bogus registrations and the issuance of fake invoices without actual supply of goods and services.

Since the launch of the special drive against fake registrations in mid-May 2023, authorities have identified a total of 29,273 bogus firms engaged in suspected Input Tax Credit (ITC) evasion, amounting to Rs. 44,015 crore. This drive has resulted in a savings of Rs. 4,646 crore, including Rs. 3,802 crore through the blocking of ITC and Rs. 844 crore through recovery. Notably, 121 arrests have been made in connection with these cases.

In the quarter ending December 2023, authorities detected 4,153 bogus firms, involved in suspected ITC evasion of around Rs. 12,036 crore. Of these, 2,358 were identified by Central GST Authorities. The proactive measures protected revenue amounting to Rs. 1,317 crore, with Rs. 319 crore realized and Rs. 997 crore protected by blocking ITC. A total of 41 individuals were arrested, with 31 arrests made by Central GST Authorities. State-wise details are provided in the annexure.

To fortify the GST registration process, the government has introduced pilot projects for biometric-based Aadhar authentication during registration in states like Gujarat, Puducherry, and Andhra Pradesh.

Furthermore, the government is actively curbing tax evasion through initiatives such as sequential filing of GST returns, system-generated intimation for reconciliation of tax liability gaps in GSTR-1 & GSTR-3B returns, and the gap between ITC available as per GSTR-2B & ITC availed in GSTR-3B returns. Data analytics and risk parameters are being employed for the detection of fake ITC, among other measures.