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HomeUncategorizedGST: Tax Authorities Disclose INR 25K Cr Tax Evasion Due to False...

GST: Tax Authorities Disclose INR 25K Cr Tax Evasion Due to False Tax Credit Claims



Arpit Kulshrestha

GST Officers Unveil INR 25K Cr Tax Evasion by 18,000 Fake CompaniesGST Officers Unveil INR 25K Cr Tax Evasion by 18,000 Fake Companies

It was discovered by the GST officers that nearly 18,000 bogus companies have been evading taxes of around Rs 25,000 crore. By claiming the tax benefits without performing the real business these companies were being made merely to cheat the Goods and Services Tax (GST) system.

This investigation which ran from August 16 to the end of October consists of validating 73,000 dubious GST registrations. It confirmed that 18,000 of these registration were not real after the thorough checks. Such bogus companies manipulated the system of Input tax credits asserting the tax refunds on the bogus transactions which made the expense of the government to nearly Rs 24,550 crore.

This investigation is part of the government’s effort to address counterfeit GST registrations and safeguard public finances. It comprises an earlier drive from May to July 2023, which discovered 21,791 bogus companies in Rs. 24,010 crore of tax evasion. These two investigations collectively demonstrate the prevalence of GST fraud and underscore the government’s dedication to combating it.

In what way does the fraud work? The ITC system permits businesses to lessen their tax load by asserting credit on GST filed for their purchases. Such bogus companies utilised the same system by making bogus invoices stating to had made purchases. Through this way tax refunds are being claimed by them on the transactions that never took place, taking money that must have gone to public services and government projects.

To avoid similar fraudulent activities in the future, authorities have intensified physical inspections of GST registrations, making it more difficult for counterfeit businesses to obtain tax advantages. This novel strategy seeks to guarantee that only legitimate businesses benefit from input tax credit (ITC).

With this success, the government plans to further enhance the GST system and combat tax fraud. As they continue to improve compliance, businesses will undergo increased scrutiny, making it more difficult for fraud to remain undetected.

Disclaimer:- “All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check.”


Published by Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.
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