Fake GST Registrations and Fraudulent ITC Claims: CGST and SGST Officers to meet under Revenue Secretary to hold Discussion

Tax Chief Malhotra spearheads crackdown on fake GST registrations after record collections
Fake GST Registrations - Fraudulent ITC Claims - CGST - SGST Officers - Revenue Secretary - hold Discussion - taxscan

India’s Revenue Secretary, Sanjay Malhotra, is taking the helm in a coordinated effort to tighten the Goods and Services Tax ( GST ) net following a surge in tax collections. This move comes in wake of a record-breaking ₹2.10 lakh crore collected through GST in April, a positive indicator of India’s economic health. However, a growing concern is the presence of companies that exploit loopholes in the system to avoid paying their fair share of taxes.

These fraudulent companies register for GST with the sole intention of claiming Input Tax Credit ( ITC ), a tax benefit that offsets the tax paid on purchases against the tax collected on sales. By manipulating the system, these companies claim ITC without ever actually supplying any goods or services. This not only deprives the government of vital tax revenue but also distorts fair competition in the market.

To combat this issue, the upcoming meeting led by Malhotra will focus on implementing stricter registration rules. These new regulations will make it more difficult for shell companies to establish themselves for the sole purpose of tax evasion. Additionally, tax authorities will leverage advanced data analytics and artificial intelligence tools to identify suspicious taxpayers. By analyzing vast amounts of data, these tools can flag inconsistencies and unusual patterns that may indicate fraudulent activity.

Government data reveals over 14,600 GST evasion cases across the country, with states like Haryana, Gujarat, Maharashtra, and West Bengal showing a higher concentration of such activities. The upcoming meeting between central and state tax officials under Malhotra’s leadership signifies a robust approach to tackling this challenge and safeguarding India’s tax revenue.

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