GST officers have uncovered fraudulent input tax credit claims worth Rs 15,851 crore in the April to June quarter of the current financial year. This marks a 29 percent increase from the same period last year, even though the number of fake firms detected has gone down, officials said.
A total of 3,558 fake firms were identified during this period in FY26, compared to 3,840 in the same quarter of FY25. Authorities believe this drop in the number of fake firms shows that the recent crackdown on fake GST registrations is showing results. “On an average, about 1,200 fake firms are getting detected every month,” said an official.
The fraudulent ITC claims were identified by both central and state GST officers. In the same April to June period, 53 individuals were arrested and Rs 659 crore was recovered. In the previous year, Rs 12,304 crore worth of fake ITC was detected, involving 3,840 fake firms, with 26 arrests and a recovery of Rs 549 crore.
Under the GST system, input tax credit refers to the tax paid by businesses on purchases, which can later be claimed as a deduction while paying final tax. The creation of fake firms to falsely claim ITC remains one of the biggest challenges for GST authorities.
In the full year 2024 to 2025, officers detected 25,009 fake firms involved in fraudulent ITC claims amounting to Rs 61,545 crore.
Two national-level drives have been conducted to combat fake GST registrations. The first drive, between May 16 and July 15, 2023, found 21,791 non-existent registered entities and uncovered Rs 24,010 crore in suspected tax evasion. The second drive, from April 16 to October 30, 2024, led to the detection of 18,000 fake companies linked to Rs 25,000 crore in tax fraud.
To tighten control, the GST registration process has been made stricter. Physical verification and Aadhaar authentication are now required for applicants flagged as risky by data analytics, while non-risky applicants receive registration within 7 days.
The GST Act allows strong actions against fake ITC, including arrests, blocking of credit, cancellation of registration and attachment of properties or bank accounts for recovering dues.
Also read:Â Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter |The Mainstream formerly known as CIO News Whatsapp Channel | The Mainstream formerly known as CIO News Instagram
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
