The government uncovers 29,273 fictitious firms in the GST scam and takes strong action against dishonest businesses

The government uncovers 29,273 fictitious firms in the GST scam and takes strong action against dishonest businesses

The government uncovers 29,273 fictitious firms in the GST scam and takes strong action against dishonest businesses

Authorities found 4,153 shell companies between October and December that they believe were engaged in evading input tax credits worth around Rs 12,036 crore. Notably, the Central GST officials were able to identify 2,358 of these fraudulent companies.

Over 29,000 phony companies engaged in fictitious ITC claims of Rs 44,000 crore have been discovered by GST inspectors.

On January 7, the government said that 29,273 fictitious companies had been discovered by GST authorities, who were involved in fraudulent input tax credit (ITC) claims of Rs 44,015 crore over the eight months leading up to December 2023. The finding came about as a result of a determined attempt to fight fraud. Signing up. A total of Rs 4,646 crore in income has been saved as a consequence of the action taken against these bogus businesses. Most significantly, this move demonstrates the Center's dedication to preventing tax evasion and preserving the integrity of the Goods and Services Tax (GST) regime.

Officials discovered 4,153 suspected shell companies during the October–December quarter that were reportedly engaged in ITC evasion of almost Rs 12,036 crore. Of these identified fraudulent businesses, 2,358 were found thanks in part to the efforts of Central GST officers.

Maharashtra leads the list of states with 926 identified phony entities engaging in suspected ITC evasion in attempts to identify and locate these organizations. Following Maharashtra, Rajasthan (with 507), Delhi (483), and Haryana (424) are the other states that have reported a high number of fraudulent firms.

The identification of fictitious companies implicated in alleged ITC evasion during the December quarter resulted in the protection of Rs 1,317 crore in revenue. Of this, Rs 997 crore has been shielded by denying ITC, and Rs 319 crore has already been recovered. According to the Finance Ministry, 31 of the 41 people detained in relation to these instances were done so by Central GST officers.

"Since the commencement of the targeted campaign against fraudulent registrations in mid-May 2023, 29,273 fictitious companies accused of evading input tax credit (ITC) worth Rs 44,015 crore have been identified. Savings of Rs 4,646 crore have resulted from this, of which Rs 3,802 crore have come from the blockage of ITC and Rs 844 crore have come via recovery. It added in a statement that 121 arrests have been made in relation to the cases so far.

In Maharashtra, a case involving 926 fictitious companies and potential tax evasion of Rs 2,201 crore was discovered in the fourth quarter of 2018. In relation to these instances, 11 people were arrested by the authorities. In a similar vein, 11 people were detained in Delhi after it was discovered that 483 shell companies had allegedly avoided paying taxes totaling Rs 3,028 crore. These numbers demonstrate the extent of alleged fraud and the associated financial costs, highlighting the need of robust enforcement mechanisms to stop tax evasion inside the GST system.

In Andhra Pradesh, there is a case involving 19 fictitious corporations accused of evading taxes totaling Rs 765 crore. Haryana has discovered 424 phony companies and is accused of evading taxes totaling Rs 624 crore.

In Uttar Pradesh, 443 fraudulent companies were found to be engaged in an alleged Rs 1,645 crore in GST evasion. Five people were detained in the state during the quarter in relation to these cases.

A focused campaign is being conducted nationwide by the Central Board of Indirect Taxes and Customs (CBIC) and many State/UT Governments in an attempt to combat fraud and improve compliance with the Goods and Services Tax (GST).

The Center has strengthened the GST registration procedure by implementing a number of steps. Pilot programs using biometric-based Aadhaar authentication during registration have been initiated in the states of Gujarat, Puducherry, and Andhra Pradesh as part of these endeavors. By using biometric identification, the GST system hopes to improve security, expedite the registration process, and lower the possibility of fraudulent registrations.