In the ongoing battle against Goods and Services Tax (GST) fraud, GST officers have unearthed a massive Input Tax Credit (ITC) evasion worth ₹35,132 crore involving 17,818 fake firms. This discovery, reported for April-October FY 2024-25, underscores the extent of fraudulent activities plaguing the GST system.
Minister of State for Finance Pankaj Chaudhary revealed this alarming data in a recent Lok Sabha session.
How ITC Evasion Was Detected
Authorities employed data analytics and intelligence tools to trace these fake firms. The analysis revealed:
- 18,876 cases of ITC fraud were identified.
- ₹35,132 crore was evaded via fake ITC claims.
- 69 arrests were made as part of this crackdown.
This systematic detection showcases the effectiveness of technology-driven oversight in tackling tax evasion.
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💡 Impact on Revenue and Recovery
GST officers’ vigilance has led to significant recoveries:
| Action Taken | Amount Saved |
|---|---|
| Blocking of ITC | ₹5,422 crore |
| Direct Recovery | ₹1,062 crore |
| Total Saved | ₹6,484 crore |
These steps not only prevent further revenue loss but also act as a deterrent for potential offenders.
⚖️ Legal Framework and Case Laws
Several legal provisions help combat GST fraud, including:
- Section 132 of the CGST Act – Prescribes penalties and imprisonment for tax evasion.
- Case Law: UOI vs. Bhushan Power & Steel Ltd (2023) – Highlighted the importance of stringent action against ITC fraud.
📊 Key Takeaways for Businesses
- Verify Vendors: Ensure the authenticity of suppliers to avoid unintended ITC claims.
- Maintain Compliance: Regular audits can prevent falling into the ITC fraud trap.
- Stay Informed: Keep up with GST updates and case rulings to safeguard your business.
📊 Key Takeaways for Businesses
- Verify Vendors: Ensure the authenticity of suppliers to avoid unintended ITC claims.
- Maintain Compliance: Regular audits can prevent falling into the ITC fraud trap.
- Stay Informed: Keep up with GST updates and case rulings to safeguard your business.