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

Name of the State/UT	Number of bogus firms detected	Tax Evasion suspected (Rs Cr.)	ITC amount blocked / recovered (Rs Cr.)	Arrests Made	Fake firms per lakh registered firms
Andhra Pradesh	19	765	11	0	5
Arunachal Pradesh	0	13	14	0	0
Assam	19	116	67	0	8
Bihar	30	148	88	0	5
Chandigarh	2	5	1	0	6
Chhattisgarh	26	83	34	1	15
Dad. & Ngr Haveli	0	0	0	0	0
Delhi	483	3028	90	11	61
Goa	4	29	0	0	9
Gujarat	178	445	25	3	15
Haryana	424	624	76	3	81
Himachal Pradesh	4	14	4	0	3
J&K	3	1	0	0	2
Jharkhand	23	110	2	0	11
Karnataka	223	397	59	2	22
Kerala	42	152	4	0	10
Ladakh	0	0	0	0	0
Madhya Pradesh	70	158	22	1	13
Maharashtra	926	2201	102	11	54
Manipur	0	0	0	0	0
Meghalaya	0	5	0	0	0
Mizoram	0	0	0	0	0
Nagaland	0	0	0	0	0
Odisha	138	337	7	0	42
Puducherry	2	2	0	0	8
Punjab	82	75	4	1	21
Rajasthan	507	197	31	1	59
Sikkim	2	2	2	0	18
Tamil Nadu	185	494	374	1	16
Telangana	117	536	235	1	23
Tripura	9	20	0	0	29
Uttar Pradesh	443	1645	44	5	24
Uttarakhand	66	88	0	0	33
West Bengal	126	343	18	0	17
And. & Nicobar Is	0	0	0	0	0
Lakshadweep	0	0	0	0	0
Total	4153	12036	1317	41	29

 

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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