GST Evasion: Shell Firms and Circular Trading Fuel Ongoing Fraud, Over Rs 2.23 Lakh Crore Detected in FY25
In the fiscal year 2025, GST (Goods and Services Tax) officers uncovered staggering GST evasion totaling over Rs 2.23 lakh crore. A significant portion of the 30,056 cases identified, more than half, were linked to input tax credit (ITC) fraud, resulting in evasion worth Rs 58,772 crore.
Despite stringent enforcement measures and enhanced analytics-driven scrutiny, the issue of fake invoices and ITC fraud continues to thrive under the GST regime. According to the Minister of State for Finance, Pankaj Chaudhary, the GST authorities identified tax evasion of approximately Rs 7.08 lakh crore between FY21 and FY25, which includes fraudulent ITC claims amounting to around Rs 1.79 lakh crore.
During this five-year period, a total of 91,370 GST evasion cases were detected, leading to tax recoveries through voluntary deposits exceeding Rs 1.29 lakh crore. The persistence of shell firms and circular trading practices highlights the need for ongoing vigilance and stronger regulatory measures to combat GST fraud effectively.
Stay informed about the latest developments in GST enforcement and protect your business from potential pitfalls related to fraud. For more insights on GST evasion and recovery efforts, visit Business Today.