- The Finance Ministry has revealed that GST officials have cracked down on 29,273 fake companies that were involved in fraudulent ITC claims of Rs 44,015 crore in the eight months till December 2023.
- The drive against fake registrations helped in saving revenue of Rs 4,646 crore, of which Rs 319 crore was recovered and Rs 997 crore was blocked.
- In the October-December quarter alone, 4,153 shell companies were detected, and 41 people were arrested for suspected ITC evasion of Rs 12,036 crore.
- The government has also taken steps to strengthen the GST registration process, such as introducing biometric-based Aadhaar authentication in some states.
New Delhi: The Finance Ministry has disclosed that GST officials have launched a massive drive against fake registrations and fraudulent ITC claims in the eight months till December 2023. The officials have detected 29,273 fake companies that were involved in fake ITC claims of Rs 44,015 crore. The drive helped in saving revenue of Rs 4,646 crore, of which Rs 319 crore was recovered from the offenders and Rs 997 crore was secured by blocking the ITC of the fake entities.
ITC is a mechanism that allows taxpayers to claim credit for the taxes paid on the inputs used in the production or supply of goods or services. However, some unscrupulous elements have been misusing the system to claim ITC without actually paying taxes or supplying goods or services.
The October-December quarter
The Finance Ministry has also shared the details of the drive in the October-December quarter of 2023. The officials detected 4,153 shell companies that were involved in suspected ITC evasion of about Rs 12,036 crore. Central GST officials detected 2,358 of these fake companies. Of these, a maximum of 926 companies were detected in Maharashtra, followed by 507 in Rajasthan, 483 in Delhi, and 424 such companies in Haryana.
The officials also arrested 41 people in these cases, of which 31 arrests were made by Central GST officials. The campaign during the October-December quarter helped in saving revenue of Rs 1,317 crore, of which Rs 319 crore was recovered and Rs 997 crore was blocked.
The measures to strengthen the GST registration process
The Finance Ministry has also stated that the government has taken several measures to strengthen the GST registration process and prevent the misuse of the system. One of the measures is the introduction of pilot projects of ‘biometric’ based Aadhaar authentication at the time of registration in the states of Gujarat, Puducherry, and Andhra Pradesh. This is expected to enhance the verification of the identity and address of the applicants and reduce the chances of fraud.
