The Directorate General of GST Intelligence ( DGGI ) has uncovered tax evasion amounting to Rs 1.2 trillion through the use of fake input tax credits ( ITC ) since 2020, the finance ministry announced in a Tuesday release.
Efforts are being intensified to identify and apprehend the masterminds behind these schemes and to dismantle the syndicates operating nationwide. The GST intelligence department has flagged approximately 59,000 potential fake firms for further verification and investigation, with 170 individuals involved in these fraudulent activities already arrested. This information was disclosed during the national conference of GST enforcement chiefs, following which the ministry issued its statement.
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This development comes amidst a special drive by both Central and State authorities aimed at identifying and eliminating fake GST registrations. Launched on August 16, the two-month nationwide initiative seeks to detect suspicious or fake GSTINs, conduct necessary verifications, and take corrective actions to remove these fraudulent entities from the GST system, thereby protecting government revenue.
During the conference, Revenue Secretary Sanjay Malhotra emphasised the need to balance enforcement actions with ease of doing business. He urged GST authorities at both Central and State levels to focus on identifying fake registrations during this special drive and highlighted the importance of tracking down the masterminds and beneficiaries behind the fake ITC schemes to ensure strict punitive measures are taken as a deterrent.
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Malhotra also noted that recent updates to GST returns, such as the introduction of GSTR-1A, would further support systematic efforts to combat GST evasion. Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Agarwal advised enforcement units to prioritise genuine evasion cases over interpretative issues and standard industry practices.
“Some of the best practices and guidelines issued to ensure uniformity in action and ease of doing business were also discussed,” the ministry’s release stated
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