The GST administration has undertaken a special drive against GST fraudsters and has detected 11,140 bogus registrations, Finance Minister Nirmala Sitharaman was told on Friday. The CBIC is computing the amount claimed as Input Tax Credit (ITC) by these bogus entities.

The Minister chaired a review meeting of the ongoing drive against fake billing for GST evasion. The meeting was attended by Revenue Secretary Sanjay Malhotra and Johri. The FM was briefed about action being taken against fake registrations. She was apprised of the methods being adopted like identity theft of people.

She took note of existing measures like OTP-based Aadhaar verification and biometric-based Aadhaar authentication at the time of registration in high risk cases.

According to tweets from the Finance Ministry office, the Secretary and the CBIC Chairman apprised her that AI/ML tools are being extensively used to identify possible fake networks. The Minister instructed that the GST registration process may be further strengthened using technology to curb the entry of such fake entities in the GST ecosystem. The FM called for a nationwide campaign to explain the objectives of the special drive.

Last month, the Centre and State governments launched a two-month special drive to detect suspicious/fake GSTINs and conduct the requisite verification and further remedial action to weed out these fake billers from the GST ecosystem and to safeguard Government revenue.

Johri’s statement

Earlier, talking to reporters, after a meeting on trade facilitation organised by the Confederation of Indian Industries on Friday, Johri said that GST Network identified 60,000 entities that potentially had fake registration. As a result, tax officers from both the central and state governments have initiated physical verification of these entities’ premises.

He also mentioned that the GST Council will discuss further measures to tighten regulations on fake registration and fraudulent generation of ITC as it looks to check tax evasion. “We are thinking of other measures and we will take them through the due process of the law committee and GST council,” he said. Additionally, the CBIC has issued new guidelines for GST registration, with a focus on high-risk applicants.

In April, officials conceded that GST evasion detection by tax officers almost doubled y-o-y to over ₹1.01 lakh crore in FY 23 , out of which a recovery of ₹21,000 crore was made by the officers of the Directorate General of GST Intelligence (DGGI). In FY22, DGGI, the investigative agency under the GST regime, detected evasion of over ₹54,000 crore and made a tax recovery of over ₹21,000 crore. The total number of GST evasion cases has gone up to about 14,000 cases detected in FY23, up from 12,574 cases in FY22 and 12,596 cases in FY21.

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