DGGI uncovers Rs1.2trn tax evasion through fake ITC claims

DGGI identified approximately 59,000 potential fake firms

NEW DELHI: The Directorate General of GST Intelligence (DGGI) has uncovered tax evasion totaling Rs 1.2 trillion through the use of fake input tax credits (ITC) since 2020.

The focus has been on identifying and apprehending the masterminds behind these operations and dismantling the syndicates operating across the country, according to a finance ministry release.

The Goods and Services Tax (GST) intelligence department has identified approximately 59,000 potential fake firms for verification and further investigation.

So far, 170 individuals involved in the fraudulent activities have been apprehended. This information was shared during a national conference of GST enforcement chiefs, which preceded the ministry’s release.

Special drive by Centre&States

This crackdown is part of a special drive by both Central and State authorities to identify and eliminate fake GST registrations.

The all-India two-month special drive, launched on August 16, aims to detect suspicious or fake GSTINs, conduct necessary verifications, and take corrective actions to remove these fraudulent entities from the GST system, thereby protecting government revenue.

During the conference, Revenue Secretary Sanjay Malhotra emphasized the importance of balancing enforcement with ease of doing business.

Tracking down masterminds

He urged both Central and State GST formations to concentrate on fake registrations during this special drive and stressed the need to track down the masterminds and beneficiaries of fake ITC schemes, ensuring strict action to create a deterrent effect.

Malhotra also noted that recent changes to GST returns, such as the introduction of GSTR-1A, would further support efforts to combat GST evasion more systematically.

At the event, Sanjay Agarwal, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), advised enforcement units to focus on actual evasion cases rather than interpretative issues and common industry practices.

He also highlighted the best practices and guidelines discussed during the conference, which aim to bring uniformity in enforcement actions while ensuring ease of doing business, according to the ministry’s release.

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