Ministerial group on GST discusses curbing ITC frauds, leakages by sector

The GoM on GST revenue analysis under Goa Chief Minister Pramod Sawant met on Friday and discussed sector-specific tax leakages and corrective action to curb over ₹2 lakh crore ITC frauds.

The GoM also discussed comparative analysis of pre- and post-GST revenue trends, e-invoicing and IT system enhancements for better traceability.

The GoM also discussed state-specific policy suggestions for boosting revenue, and coordination between central and state tax administrations for plugging GST evasion.

"Chaired a meeting of the Group of Ministers (GoM) on GST Revenue Analysis to review state-wise revenue trends and identify actionable strategies for improved GST collection," Sawant said in post on X.

The GoM identified Input Tax Credit (ITC) fraud as a major issue under goods and services tax (GST) and states suggested various measures to prevent it. Officials said the GoM flagged ₹2 lakh crore of ITC fraud over the past years, with states like Gujarat, Telangana, and Rajasthan making presentations on best practices for GST revenue augmentation.

The GoM would meet again soon and thereafter will submit its report to the GST Council, officials said.

In March, the GST Council had reconstituted GoM on 'Analysis of Revenue from GST'. Chaired by Sawant, the GoM had nine members, including from Bihar (Samrat Chaudhary), Chhattisgarh (O P Choudhary), Gujarat (Kanubhai Desai), Andhra Pradesh (P Keshav), Maharashtra (Ajit Pawar), Punjab (Harpal Singh Cheema), Tamil Nadu (Thangam Thennarasu) and Telangana (M B Vikramarka).

During 2024-25, central and state GST officers have detected 25,009 fake firms involved in fraudulently passing input tax credit (ITC) worth ₹61,545 crore.

As per data on ITC frauds unearthed by central and state GST officers, over the two years 2023-24 and 2024-25, a total of 42,140 fake firms were detected, which were involved in fraudulently generating ITC of over₹ 1.01 lakh crore. A total of ₹3,107 crore was recovered by way of blocking of ITC, and 316 arrests have been made.