Fake registration drive: GST officers detect 10,700 bogus firms, more than ₹10,000 crore evasion

Tax officers detect fake GST registrations, plan Aadhaar authentication in 20 states to curb evasion and misuse of system.

“Tax officers have detected around 10,700 fake registrations under the GST, involving evasion of ₹10,179 crore in the ongoing all-India drive against fake companies set up to defraud the exchequer,” a senior official said on Tuesday (September 24, 2024).

Central Board of Indirect Taxes and Customs (CBIC) member Shashank Priya said Aadhaar authentication of GST registration is already in place in 12 States and by October 4, another four States would join.

Eventually, 20 States, including Madhya Pradesh, Rajasthan, Assam, Tamil Nadu, Uttar Pradesh and Haryana, will start Aadhaar authentication. Speaking at an Assocham event, Shashank Priya also said that in future, the tax authorities may also put certain restrictions on new taxpayers based on their risk profile.

"How many invoices they can issue in a month, we may also put some restriction on that in the future... We feel very pained at the misuse of the system. We have to use all methods that are at our command to ensure that those are stopped," he said.

The CBIC official also said that the government is taking targeted action to check fake GST registration and more physical verification is taking place. The second all-India drive against fake registration began on August 16 and will continue till October 15.

He said the tax authorities have identified 67,970 GSTINs. Of this, 59% of the GSTINs or 39,965 have been verified as of September 22.

Shashank Priya said, "27% have been found to be non-existent. This percentage is almost similar compared to the last drive. We have detected evasion of ₹10,179 crore. Blocked ITC of ₹2,994 crore. Also, recovery of ₹28 crore has been done (in the second drive till September 22)."