In an all-India special drive aimed at eliminating fake GST registrations, the Directorate General of GST Investigation (DGGI) uncovered multiple clandestine tools involving card games and khaini (chewing tobacco) in over 1,300 cases of GST evasion during the April-June quarter.

According to sources, the number of total cases detected during the said quarter of the current fiscal rose to 1,343 from 1,064, showing a growth of over 26 per cent. However, the evasion of duty increased to over ₹30,000 crore from over ₹16,000 crore recording a surge of over 87 per cent. While over ₹3,000 crore was paid voluntarily, 22 individuals were arrested, a source said.

Ghee to Teen Patti

Giving details of some evaders who discovered unique ways to avoid tax, a source said specific intelligence revealed the clandestine clearance of Khaini (chewing tobacco) by a manufacturing unit located in Uttar Pradesh. Searches were conducted at multiple locations, including the manufacturing unit, warehouses and other premises of dealers, transporters and intermediaries.

“Based on evidence found during searches, over ₹450 crore worth of evasion was detected, out of which ₹17 crore has been deposited voluntarily,” he said.

According to another source, an enquiry was initiated by the Gurugram zonal unit of DGGI against an offshore gaming website and apps that provide online luck/chance-based games such as Teen Patti, barraccates, ander-bahar, lucky 7, etc. in India. The investigation revealed that these gaming websites and apps are operated by various intermediaries/individuals who receive (transact) money through various Indian Bank Accounts. These bank accounts are opened based on forged/fake KYCs.

Further investigation indicated that one of the UPI addresses through which money was being collected by the company, belongs to an entity registered under GST for trade in garments and clothing accessories. The said company is availing of ineligible ITC and discharging its GST liability through that ITC. The total suspicious ITC involved was around ₹300 crore

Special Drive

Meanwhile, tax sleuths from the Centre and the States have begun the second All-India Drive against fake registrations. This will continue till October 15 to detect suspicious/ fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST ecosystem and to safeguard government revenue. The plan involves immediate action for suspension and cancellation of the registration of the non-existent and fictitious taxpayer. Further, the matter may also be examined for blocking of input tax credit in Electronic Credit Ledger without any delay. Additionally, the details of the recipients to whom the input tax credit has been passed by such a non-existent taxpayer may be identified through the details furnished in FORM GSTR-1 by the said taxpayers.

During the first special drive, which was launched on May 16, 2023, and continued till August 14, 2023, a total of 21,791 entities (11,392 entities pertaining to State tax jurisdiction and 10,399 entities pertaining to CBIC jurisdiction) having GST registration were discovered to be non-existent. An amount of ₹24,010 crore (State – ₹8,805 crore + Centre - ₹15,205 crore) of suspected tax evasion was detected during the special drive, Finance Minister Nirmala Sitharaman said in a written response to Parliament earlier this year.

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