Officials said the Central and State GST officials have detected 25,009 fake firms which are involved in fraud in input tax credit (ITC) during 2024-25.
During the 2024-25 ending March 2025, the Central and State GST officials recovered the ITC and recovered 1,924 crore and arrested 168 persons.
According to ITC data, 2023–24 and 2024–25, 42,140 fake firms were detected by central and state GST officials in two years, which included fraudulently involving ITCs of more than ₹ 1.01 lakh crore. ₹ 3,107 crore was recovered through blocking ITC, and 316 arrests have been made.
“Central and state governments and GSTNs have taken various steps to prevent fake ITC claims, including providing intelligence inputs, detection of fraud registration and suspected e-way bill activity,” an official said. PTI,
Under the Goods and Services Tax (GST) regime, ITC refers to taxes paid by businesses on purchases from suppliers. This tax may be claimed as a credit or deduction at the time of paying the final output tax.
Working with fake ITC has been a major challenge for GST administration as dishonest elements were creating fake firms to claim ITC and cheat the treasury.
To deal with this, the GST registration process is made rigid with checks on risky applicants.
While non-relative businesses have to be provided GST registration within 7 days, physical verification and base authentication are mandatory for those who provide registration to applicants who are risky by data analytics.
As a remedy to track masterminds, the GST Act incorrectly imparts punishment to cancel the registration of taxpayers involved in ITC, suspension or fake ITC cases; Blocking ITC in electronic credit laser; And provisional infinite of property/bank accounts, etc. for recovery of government arrears.
So far, two national conferences of enforcement heads of state and central GST structures have been organized in relation to the importance of maintaining activities and ease of trade by enforcement structures.
Published – April 21, 2025 11:08 pm IST