The Indian government has intensified its crackdown on Goods and Services Tax (GST) fraud, revealing the detection of 489 bogus registrations in just six months. These fake entities used forged PAN and Aadhaar details to evade over Rs 3,000 crore in taxes, officials informed Parliament on Monday.
Analytics-Driven Crackdown on Fraudulent Networks
Minister of State for Finance, Pankaj Chaudhary, stated that the Directorate General of Analytics and Risk Management (DGARM) has significantly ramped up its scrutiny of digital data submitted during the GST registration process. The focus is particularly on proprietorship firms. The exercise involves scanning registration data for anomalies, especially where individual credentials like PAN appear to be misused.
"GST registrations are identified and shortlisted wherein misuse of individual credentials like PAN is suspected. These suspect GSTINs are shared with field formations for appropriate verification," Chaudhary told the Lok Sabha in a written reply.
Scale of the Problem: A Legacy of Fake Registrations
The latest detections, covering April to October 2024, are part of a much larger, ongoing battle. The data reveals a staggering scale of fraudulent activity:
- In the ongoing 2024–25 fiscal year so far, authorities have identified 3,977 fake GST registrations, involving suspected tax evasion of Rs 13,109 crore.
- The previous financial year, 2023–24, saw an even bigger spike, with 5,699 fraudulent registrations linked to evasion of Rs 15,085 crore.
Beyond just forged identities, the government is targeting shell entities created solely to facilitate fake invoicing and the wrongful flow of input tax credit (ITC) through the supply chain. DGARM is focused on identifying high-risk taxpayers who exist only on paper but are used to pass on ineligible ITC.
Enforcement Actions and Nationwide Drives
The analytics-led checks have been followed by concrete enforcement action. Between April and October 2024, GST officers arrested 16 persons in connection with fake registrations. This adds to 50 arrests in FY25 so far and 67 arrests in FY24, reflecting sustained pressure on organised tax fraud networks.
The Centre and states have also conducted coordinated, nationwide drives to weed out non-existent firms. Two major special operations were launched:
- Between May and August 2023.
- From August to October 2024.
These drives involved the physical verification of business premises by teams of central and state tax officials. "During this special drive, non-existent GSTINs were identified and suspended/cancelled," the minister explained.
The government's approach signals a sharper, more focused shift towards data-led enforcement to safeguard India's tax revenue and ensure a fair ecosystem for compliant businesses.
