GST Fraud: 8000 Cases Worth Rs 35,000 Crore Using Fake Input Tax Credit Discovered; Investigation Starts

A new GST fraud has come to light, which is worth more than Rs 35000, and investigation is now underway for the same.

The beneficial provision of ITC under the GST regime is quite popular amongst evaders.

Read on to find out how this GST fraud happened. 

GST Fraud Worth Rs. 35000 Detected; Investigation Begins

The beneficial provision of Input Tax Credit (ITC) under the GST law is the most popular way of evasion. However, the field formations of the Central Board of Indirect taxes and Customs (CBIC) have been on the tail of such cases and detecting them as well, way back since the beginning of the GST regime.

As per report, the CGST zones and the Directorate General of GST Intelligence (DGGI) have managed to book about 8000 cases involving fake ITC of over Rs. 35000 crore in the financial year 2020-21.

In the same financial year, 426 people were arrested; these included 14 professionals such as CAs, Lawyers and masterminds, beneficiaries, directors etc. there is a high proportion of portion of fake ITC availment and utilization, which called for a nation-wide special drive against the fake GST invoice. This was launched  w.e.f. 9th November 2020 and continues to exist today.

500 Cases Involving 1200 Entities Detected

During the current financial year, Directorate General of GST Intelligence and CGST Zones under CBIC have detected over 500 cases involving 1200 entities and arrested 24 persons. This was during the nationwide drive against unscrupulous entities.

New age IT tools, digital evidence are being used along with collecting information from other departments of the government in order to catch the scammers. 

This drive also helped in better compliance and revenue collection and cases of fake ITC availment against some well-known companies were also booked.

As per reports, the enforcement drive against the fake invoice fraudsters and other GST evaders will most likely be upscaled in order to catch and book unscrupulous elements that are involved in illegal activities which will in turn help in defrauding the government exchequer.

In addition to the cases of  fake ITC, the DGGI and other CGST formations have also been able to detected GST evasion that involved misclassification, undervaluation and clandestine supplies of goods and services.