SRINAGAR: The Government has said it has detected fraudulent claims of Goods and Services Tax (GST) Input Tax Credit (ITC) amounting to Rs 1,19,286 crore over the last three financial years, with nearly 31,704 cases registered by Central tax formations.
Responding to an unstarred question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said that in 2022-23, authorities registered 7,231 cases involving Rs 24,140 crore, with Rs 2,484 crore recovered through voluntary payments. The following year, 9,190 cases were detected with a total value of Rs 36,374 crore, and Rs 3,413 crore was recovered. In 2024-25, the number of cases spiked to 15,283, involving Rs 58,772 crore, though voluntary recovery in this period was lower at Rs 2,675 crore.
The Minister said that the Government has introduced a series of system-based checks and verification measures to combat fake ITC claims. These include restricting ITC claims to invoices uploaded by suppliers in GSTR-1 and reflected in GSTR-2B, mandatory sequential filing of GST returns, and compulsory e-invoicing for all B2B transactions above Rs 5 crore turnover.
Registration processes have also been tightened, with OTP-based PAN verification, biometric-based Aadhaar authentication, physical verification in high-risk cases, mandatory furnishing of bank account details, and geo-tagging of business premises. Registrations can now be suspended for failure to file returns or provide valid bank account details within the prescribed time.
To improve invoice monitoring, the Government rolled out the Invoice Management System (IMS) in late 2024, enabling taxpayers to accept, reject, or flag invoices for verification before claiming ITC. Fraudulent availment of ITC without a valid invoice is now a cognisable and non-bailable offence, with penalties applicable to both suppliers and beneficiaries of such transactions.
The Ministry said coordinated special drives were conducted between Central and State GST administrations from May to July 2023 and again from August to October 2024 to identify and weed out fake GST registrations linked to bogus ITC claims.
