Over Rs 44,000 Crore in GST Evasion Unearthed by Finance Ministry in Recent Investigations

• Initiative Against Fraudulent Registrations:

- Central Board of Indirect Taxes and Customs (CBIC) and State/UT Governments initiated a drive against non-existent/bogus GST registrations and fake invoices.

- Aim: Combat fraud and enhance compliance in the Goods and Services Tax (GST) system.

• Outcomes of the Drive (Since Mid-May 2023):

- Identification of 29,273 fictitious entities involved in suspected Input Tax Credit (ITC) evasion, amounting to Rs.44,015 crore.

- Savings: Rs.4,646 crore (Rs.3,802 crore through ITC blocking and Rs.844 crore through recovery).

- Arrests: 121 individuals linked to these cases.

• Fraudulent Entities in Q4 2023:

- Discovery of 4,153 fraudulent entities.

- Potential ITC evasion: Rs.12,036 crore.

- Central GST Authorities found 2,358 fake organizations.

- Revenue safeguarded: Rs.1,317 crore (Rs.319 crore realized, Rs.997 crore through ITC blocking).

- Arrests: 41 individuals, with 31 by Central GST authorities.

• Government Steps to Improve GST Registration:

- Introduction of pilot projects for biometric Aadhar authentication during registration in Gujarat, Puducherry, and Andhra Pradesh.

• Measures to Reduce Tax Evasion:

- Sequential filing of GST returns.

- System-generated intimation for reconciliation of tax liability gaps in GSTR-1 and GSTR-3B returns.

- Use of data analytics and risk parameters to detect fake ITC.

• Government's Focus on Enhanced Registration Procedures:

- Implementation of biometric Aadhar authentication during registration in pilot projects across specific regions.

- These initiatives are part of broader efforts to improve the integrity of the GST registration process. Source : https://cfo.economictimes.indiatimes.com/news/tax-legal-accounting/gst-evasion-of-over-rs-44000-crore-detected-since-may-finance-ministry/106622828