Major Crackdown on GST Frauds: 29,273 Bogus Firms Unearthed, Evading Rs. 44,015 Crores – 121 Arrested

29,273 bogus firms have been exposed, allegedly involved in suspected fraud by way of Input Tax Credit (ITC) evasion amounting to Rs. 44,015 crores

In a relentless effort to combat fraud in the 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 undertaken a targeted drive against non-existent and bogus registrations, as well as the issuance of fake invoices lacking genuine goods and services transactions.

Since the initiation of the special drive in mid-May 2023, a staggering 29,273 bogus firms have been exposed, allegedly involved in suspected frauds by way of Input Tax Credit (ITC) evasion amounting to Rs. 44,015 crores. This robust action has resulted in savings of Rs. 4,646 crores, achieved through the blocking of ITC worth Rs. 3,802 crores and the recovery of Rs. 844 crores. To date, 121 arrests have been made in connection with these cases.

During the quarter ending December 2023, a total of 4,153 bogus firms engaging in suspected ITC evasion of approximately Rs. 12,036 crores were identified. Central GST Authorities played a crucial role in detecting 2,358 of these fraud firms, safeguarding revenue amounting to Rs. 1,317 crores. Of this, Rs. 319 crores have been realized, while Rs. 997 crores have been protected through the blocking of ITC. Notably, 41 individuals have been arrested, with 31 of these arrests made by Central GST Authorities. Detailed state-wise information is provided in the annexed section.

To fortify the GST registration process, the Government has implemented various measures, including pilot projects for biometric-based Aadhar authentication during registration in states such as Gujarat, Puducherry, and Andhra Pradesh. Additionally, efforts to combat tax evasion involve the introduction of sequential filing of GST returns, system-generated intimation for reconciling gaps in tax liability in GSTR-1 and GSTR-3B returns, and addressing disparities between ITC available in GSTR-2B and ITC availed in GSTR-3B returns. The utilization of data analytics and risk parameters for detecting fake ITC further strengthens the government’s anti-evasion initiatives.

This proactive approach by GST formations against such frauds underscores the commitment to creating a transparent and compliant tax ecosystem, fostering trust among taxpayers and ensuring the integrity of the GST framework.

Action against bogus firms during Quarter ending in December 2023

To Access the related Press release of Ministry of Finance CLICK HERE

To Access the E-Way Bill System Update on Blocking of E-Way Bill Generation CLICK HERE

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