GST Evasion
CBIC Exposes ₹26,543 Crore GST Evasion in Latest Crackdown on Fake Input Tax Credit

CBIC Uncovers Rs 26,543 Crore GST Evasion in Nationwide Drive

The Central Board of Indirect Taxes and Customs (CBIC) has unveiled a staggering GST evasion amounting to Rs 26,543 crore during its second nationwide initiative to combat fraudulent input tax credit (ITC). Since August 16, CBIC officials have scrutinized 68,903 high-risk taxpayers, revealing that approximately 18,472 entities—almost 27 percent—were found to be non-existent, as reported by sources within the GST Council.

“The evasion detected in the second drive is a huge amount of Rs 26,543 crore. Almost 27 percent of entities were found bogus. In states such as Maharashtra, Gujarat, and Delhi, the highest instances of evasion have been recorded,” one source informed Moneycontrol.

Despite the significant amount of tax evasion identified, recovery continues to pose a challenge. “In many cases, the ITC is utilized before the fraud is discovered,” the source explained. “This limits the scope of recovery, even though the average quantum of fraud per fake entity stands at Rs 1.5 crore.”

The findings from this second drive are expected to be presented at the upcoming GST Council meeting on December 21. The Council is anticipated to discuss measures aimed at enhancing GST compliance and further tightening regulations against bogus invoicing and ITC fraud.

Pending Verifications

Out of the original list of 74,070 taxpayers flagged as high-risk, around 5,000 remain to be verified, primarily from Delhi and Maharashtra. Maharashtra alone accounts for 765 pending verifications, while Delhi has 3,300 unresolved cases. “The delay in Maharashtra is likely due to the state elections,” noted an insider.

The list of high-risk taxpayers originated from the GST Network (GSTN), which states supplemented using local intelligence. “GSTN had flagged risky taxpayers, and states had the liberty to add to the list based on local intelligence,” the source emphasized.

This operation marks the second significant action against fraudulent ITC schemes, following the successful first drive. The CBIC had previously conducted a two-month special investigation from May 14 to July 14, during which 77,200 entities were verified, revealing that 20,800 were found to be bogus.

The ongoing efforts underline the CBIC’s commitment to uncovering tax evasion and promoting compliance in the GST framework.

Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked...