The Goods and Services Tax (GST) officials have discovered the credit (ITC) claims of Rs 15,851 crore in the first (April-June) quarter of the current financial year. This is 29 percent more than the same period of the previous financial year. However, the number of fake companies has decreased on an annual basis. The total number of fake companies caught by central and state GST officials during the first quarter of FY 2025-26 was 3,558, which is less than 3,840 in the same quarter of the previous financial year. A committee of state finance ministers under the chairmanship of Goa Chief Minister Pramod Sawant is currently studying tax evasion in specific areas and is considering ways to prevent ITC fraud.
1200 fake companies revealed every month
An official said that on average, about 1,200 fake companies are getting caught every month. The number of fake companies during the April-June period is less than the same period last year, which shows that the campaign against fake GST registration has been effective. According to the data of fake companies caught by central and state GST officials during the June quarter of the current financial year, ITC fraud of Rs 15,851 crore was taken from 3,558 fake firms. During this period, GST officials arrested 53 people and recovered Rs 659 crore.
This was the figure last year
In the first quarter of FY 2024-25, GST officials traced fake ITC worth Rs 12,304 crore connected with 3,840 fake companies. 549 crore rupees were recovered and 26 people were arrested. Under the GST system, ITC companies are from taxes paid on purchases from suppliers. This tax can be claimed as credit or deduction while paying tax liability. Dealing with fake ITC has been a big challenge for GST administration as dishonest elements make fake companies only to claim ITC and lime the government treasury.
Such figures were in 2023
During the year 2024-25, GST officials had discovered 25,009 fake companies involved in ITC fraud of Rs 61,545 crore. GST officials have launched two all India campaigns against fake registration under the Goods and Services Tax (GST). In the first campaign against fake registration between May 16, 2023 to July 15, 2023, a total of 21,791 units with GST registration did not exist. During the first special campaign, suspected tax evasion of Rs 24,010 crore was detected. Similarly, in the second campaign between April 16 and October 30, 2024, GST officials discovered around 18,000 fake companies registered under GST, which have been involved in a tax evasion of about Rs 25,000 crore.