GST officers detect Rs 4,000 cr of Input Tax Credit fraud in Apr-Jun

GST officers detected over Rs 4,000 crore of Input Tax Credit (ITC) fraud in June quarter 2021-22, Parliament was informed on Monday.

In a written reply to a question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said 7,268 cases of ITC fraud involving Rs 31,233 crore were detected by the Central GST officers in 2020-21.

In April-June period of 2021-22 financial year, 818 such fraud cases were booked involving Rs 4,002 crore.

"Necessary steps as mentioned in the GST law are being taken to recover the amount from the tax evaders pertaining to ITC frauds," Chaudhary said.

In the current fiscal year till June, Rs 175.21 crore of ITC fraud has been recovered and 19 show cause notices (SCN) have been issued.

In 2020-21, 94 SCNs were issued and Rs 2,231.64 crore was recovered.

In reply to a separate question, Chaudhary said the mechanism for claiming Goods and Services Tax (GST) refund by exporters is a streamlined process.

"Cases have been booked where exporters have claimed refund of GST on the basis of fraudulent documents," he said.

In April-June 2021, 13 such cases against exporters were booked and the quantum of ITC refund fraud detected was Rs 313.55 crore.

In 2020-21, Rs 434.93 crore worth ITC refund fraud by exporters was detected, while in 2019-20 it was Rs 799.78 crore.

Chaudhary further said though the interface for the taxpayers is on digital and software, tax evaders commit fraud even on electronic platforms by way of mis-representation of facts like furnishing of fake credentials at the time of registration; by indulging in raising fake invoice to avail undue ITC.

"To prevent tax-evasion, various validations have been built in the GSTIN/ CBIC system to weed out tax evaders," he added.

In reply to another question, the minister said under the Merchandise Exports from India Scheme (MEIS), Rs 30,525.20 crore and Rs 608.50 crore have been given as incentives to exporters for 2019-20 and 2020-21, respectively.

To a question on whether the Directorate of Revenue Intelligence has issued notices to exporters, he said DRI has issued show cause notices to 17 exporters during the period 2018-19 to 2021-22 (till June 30, 2021) for irregularities in respect of imports made against Advance Authorizations prior to exports.

Chaudhary further said the government has taken a number of measures to process the GST refund claims speedily, including making the refund process fully automated, specified time limits for processing of claims, special refund drives for priority disposal of pending claims.