Over 25,000 Fake Firms Detected in GST ITC Fraud, ₹1,924 Crore Recovered in 2024-25
Over 25,000 Fake Firms Detected in GST ITC Fraud, ₹1,924 Crore Recovered in 2024-25
In the 2024-25 fiscal year, Central and state GST officers uncovered 25,009 fake firms involved in fraudulent input tax credit (ITC) activities, amounting to ₹61,545 crore in fraud, officials reported. As part of their efforts, ₹1,924 crore was recovered through blocking ITC, and 168 individuals were arrested.
Between 2023-24 and 2024-25, a total of 42,140 fake firms were detected, generating over ₹1.01 lakh crore in fraudulent ITC. In total, ₹3,107 crore was recovered through blocking ITC, and 316 arrests were made.
The government and GST Network (GSTN) have implemented various measures to combat fake ITC claims, including intelligence sharing, identifying fraudulent registrations, and monitoring suspicious e-way bill activities. Under GST, ITC allows businesses to claim deductions on taxes paid to suppliers, but fraudulent firms exploit this system to defraud the government.
To address the issue, the GST registration process has been tightened, requiring physical verification and Aadhaar authentication for high-risk applicants. Severe penalties, including registration cancellation and property attachment, are enforced for those involved in fake ITC claims.