GST Crackdown Detects 5k Bogus Businesses Availing Refunds Over ₹8,100 Crore In Last 6 Months

A crackdown on shell companies evading Goods and Service Tax (GST) and claiming fake Input Tax Credits (ITC) using stolen identities by the Director General GST Intelligence (DGGI) has led to detection of over 5,000 bogus businesses availing tax refunds of over ₹8,100 crore in the last six months.

A multi-agency probe in the fake ITC refunds racket detected frauds to the tune of ₹10,000 crore and revealed at least 3,000 shell companies created with fake Aadhaar and PAN details.

Majority evasion is by offshore entities of online betting and gambling

The majority of GST evasion is by offshore entities providing online betting and gambling services, evading taxes by not registering for GST in India and not paying taxes on their revenue generated from Indian customers.

Last month, DGGI Mumbai Zonal Unit busted a gang of ‘fake GST bill operators’ providing bogus billings and fake invoices to the metal and scrap industry. A probe revealed that around 160 companies were floated, using documents that were fraudulently procured from poor people with promises of help to get Covid relief and employment and register fictitious companies, bank accounts. The syndicate raised bogus invoices to the tune of Rs1,000 crore and availed input tax credit claims of Rs206 crore.

In 2022-23, DGGI data reveals that GST evasion detection by tax officers almost doubled to over ₹1.01 lakh crore compared to recovery of ₹21,000 crore the previous fiscal.