GST officers detect over 29,000 bogus firms involved in fake ITC claims

The government on Sunday said GST officers have detected 29,273 bogus firms involved in fake Input Tax Credit (ITC) claims of Rs 44,015 crore in eight months till December 2023 during a drive against fake registration, which helped save revenue of Rs 4,646 crore.

In the October-December quarter, 4,153 bogus firms that involved suspected ITC evasion of around Rs 12,036 crore were detected. As many as 2,358 of these bogus firms were detected by the Central GST Authorities.

Maharashtra topped the list with 926 bogus firms detected, followed by Rajasthan (507), Delhi (483) and Haryana (424).

The detection during the December quarter protected revenue of Rs 1,317 crore of which Rs 319 crore has been realised and Rs 997 crore has been protected by blocking ITC. As many as 41 persons were arrested in these cases while 31 of these arrests were made by Central GST Authorities, the finance ministry said.

"Since the initiation of the special drive against fake registrations in mid-May 2023, a total of 29,273 bogus firms involved in suspected Input Tax Credit (ITC) evasion of Rs 44,015 crore have been detected. This has saved Rs 4,646 crore of which Rs 3,802 crore is by blocking of ITC and Rs 844 crore is by way of recovery. So far, 121 arrests have been made in the cases," it said in a statement.

During the December quarter, the suspected tax evasion by 926 bogus firms in Maharashtra worked out to be Rs 2,201 crore. 11 persons were arrested. In case of Delhi, the suspected tax evasion by 483 bogus firms was Rs 3,028 crore and 11 people were arrested.

In case of Andhra Pradesh, the suspected tax evasion by 19 bogus firms was Rs 765 crore, while in case of Haryana 424 bogus firms were detected involved in the evasion Rs 624 crore.

In Uttar Pradesh, 443 bogus firms were detected involved in suspected GST evasion of Rs 1,645 crore. Five persons were arrested in the state during the quarter.

To curb fraud in Goods and Services Tax (GST) and increase compliance, the GST formations, under the Central Board of Indirect Taxes and Customs (CBIC) and the State/UT Governments, across the country are carrying out a focused drive on the issue of non-existent / bogus registrations and issuance of fake invoices without any underlying supply of goods and service

The ministry said the Government has taken various measures to strengthen the GST registration process. Pilot projects of biometric based Aadhar authentication at the time of registration have been launched in the States of Gujarat, Puducherry and Andhra Pradesh.

Besides, the Government has endeavoured to curtail evasion of tax through measures such as sequential filing of GST returns, system generated intimation for reconciliation of the gap in tax liability in GSTR-1 & GSTR- 3B returns and of the gap between ITC available as per GSTR-2B & ITC availed in GSTR-3B returns, use of data analytics and risk parameters for detection of fake ITC, etc, the ministry added.