GST Evasion: DGGI discovered 99% increase in GST Evasion in FY24; Tax Fraud of Rs.2.01 lakh crore unearth

In a strong attempt to combat GST fraud, the Directorate General of GST Intelligence (DGGI) claims to have identified 6,074 cases of duty evasion totalling Rs.2,01,931 crore, according to top sources.

There is an unexpected 99% increase in year-on-year (YoY) detection of tax evasion as compared to the amount of duty evasion detected by the tax authority’s investigation arm.

Upon identification of evasion, taxpayers willingly paid Rs.26,598 crore, a 28.4% rise over the previous year, according to sources. In the financial year 2023-24, DGGI detained 147 individuals suspected of masterminds of tax evasion, they stated.

In the financial year 2022-2023, DGGI uncovered 4,872 cases of duty evasion worth Rs.1,01,354 crore. Taxpayers paid Rs.20,713 crore voluntarily, and 92 arrests were made, according to last year’s report card of DGGI.

According to sources, the identified tax evasion of more than Rs.2 lakh crore accounts for around 10% of overall GST collections in the previous financial year.

They further stated that taxpayers voluntarily contributed Rs.26,598 crore out of the total evasion found, accounting for approximately 1.4% of overall GST collections in FY 2023-24.

“The Directorate General of GST Intelligence (DGGI), which is the main investigating agency for GST matters, investigated matters on diverse sectors in FY24, post which the internal analysis highlighted that the top sectors where maximum tax evasion was recorded included— banking, financial services and insurance, pharmaceuticals, e-commerce operators, secondment (import of manpower services), online gaming, and casinos, among others,” according to the sources.

To combat the claims of fake ITC (input tax credits) in FY24, DGGI resumed its special operations against ITC fraudsters to plug revenue leaks into the system.