CBIC Identifies 25% of 69,000 Suspected GST Registration Fake; Fake Claims of Rs. 15000 Cr
The 69,000 suspected Goods and Services Tax (GST) accounts have been the subject of a two-month special investigation by the Central Board of Indirect Taxes and Customs (CBIC), which has found a lot of evidence suggesting that about 25% of them are fake. The same would be taken as an agenda for the next GST council meeting to be held on 11th July 2023. Benefits of over Rs 15,000 crore...
The 69,000 suspected Goods and Services Tax (GST) accounts have been the subject of a two-month special investigation by the Central Board of Indirect Taxes and Customs (CBIC), which has found a lot of evidence suggesting that about 25% of them are fake. The same would be taken as an agenda for the next GST council meeting to be held on 11th July 2023.
Benefits of over Rs 15,000 crore were unlawfully received by these bogus accounts. 17,000 of these accounts are bogus, according to the special drive.
By leveraging the artificial intelligence and data analytics, CBIC authorities identified approximately 69,000 accounts within the GST database that were flagged as suspicious. These accounts were scrutinized for potential fraudulent activities. It is worth noting that the total number of taxpayers registered under the GST system is currently 1.39 crore.
Recently, the Directorate General of GST Intelligence (DGGI) of Jaipur busted into the Input Tax Credit (ITC) rackets operating in 14 states through 549 fake firms involving bogus ITC claims of Rs. 1,047 crores. The officials have traced the mastermind of the racket in Delhi and arrested.
The method of operation suggested that the syndicate has a strong connection with multiple brokers who facilitate the acquisition of companies, bank accounts, SIM cards, and manage their real-time gross settlement (RTGS) or cash transfers.
Another major fake claim caught by the DGGI is the scam involving 539 fictitious firms that distributed bogus ITC worth Rs. 1,124.66 crore. The officials arrested one key operative person.
According to the forensic analysis, numerous bogus Aadhar cards, PAN cards, GST registrations of fake businesses, sample invoices from fake businesses, etc. were found. The initial findings suggested that the highly evasion-prone metal/iron and steel sector is where the fake ITC credit ultimately ended up.
The DGGI has identified minor and major fake ITC claims through fake companies. Also, the fake companies were formed using the PAN and aadhar cards of other innocent people. And this amounts to identity theft.
However, the CBIC is going to implement biometric authentication and geo-tagging as a measure to counter the proliferation of fraudulent Goods and Services Tax (GST) registrations.
Read More: CBIC intends for Biometric Authentication and Geo-tagging to curb Fake GST Registrations
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