A quarter of 69,000 suspected GST accounts fake, reveals CBIC drive

A drive by the Central Board of Indirect Taxes and Customs (CBIC) to check fake accounts registered with the GST Network has revealed that a quarter of the identified entities do not exist or have vanished after availing of benefits worth Rs 15,000 crore, according to a report in The Times of India (TOI).

During the two-month drive, authorities used artificial intelligence (AI) and data analytics to identify around 69,000 suspects, of which 17,000 were fake accounts. These accounts cornered bogus input tax credit.

The role of entities in the chain is under the scanner. For instance, a leading food delivery service provider is said to have availed of manpower services from entities that were found to be bogus.

The government sources said that the largest number of fakes detected from the list of suspect registrations were from Delhi, according to the TOI report.

The CBIC now proposes to undertake a periodic exercise to ensure that benefits are not misused.

The agency is looking to withdraw flexibilities that had been given to pay taxes by amending returns filed by a supplier to ease the burden due to the pandemic.

A senior official said that the main concern is to prevent leakages and some decisions have already been taken by the GST Council, which will be implemented soon.

The issue is expected to come up at the next meeting of the GST Council, where the details will be shared with the state finance ministers.

Officials, however, ruled out fresh tightening of registration norms, arguing that the idea was to make the process smooth for taxpayers, instead of burdening them with higher compliance.

The suspects were identified by the tax authorities after careful scrubbing of the database, which includes 14 million GST payers.