GST Evasion: GST Officers identify 15000 Fake Entities evaded GST worth Rs.38,000 crore

Even as tax officials seek to close loopholes in order to tighten compliance for goods and services tax (GST), they have already identified almost 15,000 businesses and uncovered evasion totaling more than Rs 38,000 crore over the years. This covers incidents of fraudulent GST registration including the use of other people’s PAN and Aadhaar numbers to claim Input Tax Credit, as well as the identification of fake organisations.

The central GST administration filed roughly 5700 fake GST registration cases as a result of mismanagement of the other individual’s PAN and Aadhaar information for ITC claiming between July 1, 2017, and June 30, 2018, . In such cases, evasion totaled Rs 27,246.16 crore, with Rs 922.58 crore recovered and 331 arrests made.

Furthermore, 9,369 bogus firms were discovered in relation to enterprises suspected of committing fraud and claiming fake ITC of Rs 10,902 crore. In these cases, Rs 45 crore was recovered and seven people were arrested.

When asked about cases of bogus GST registration in the Lok Sabha on Monday, Minister of State for Finance Pankaj Chaudhary provided the facts.

Sub-rule (4A) has been included in Rule 8 of the CGST Rules, 2017, based on GST Council recommendations, to provide for risk-based biometric-based Aadhaar authentication of registration applicants, and the project is being piloted in three States and Union Territories, an official stated.

In addition, “The Goods and Services Tax Network (GSTN) has activated the functionality of geocoding the address of the registrants’ principal place of business,” on whether the Central Board of Indirect Taxes and Customs intends to introduce biometric verification and geo-tagging of dangerous organisations under GST in the country.

Between May 16 and July 15, the CBIC conducted a special all-India drive to weed out fake registrations in order to crack down on GST evaders.

The GST Council, in its 50th meeting earlier this month, also took a variety of steps to combat fraudulent organisations and evasion, including a requirement that bank account details be provided within 30 days of registration or before filing of GSTR-1.