GST Officers Detect ₹35,132 Crore ITC Fraud Linked to Over 17,000 Fake Firms

In an official press release issued on December 10, 2024, the GST department announced the discovery of an enormous Rs. 35,132 crore Input Tax Credit ( ITC ) fraud involving 17,818 fake firms. This is one of the largest GST fraud cases ever uncovered showing the government's commitment to tackling tax evasion.

Details of the Fraud

The investigation revealed that the fraudulent firms were engaged in creating fake invoices and conducting fictitious transactions to claim ITC without any actual supply of goods or services. The elaborate network of shell companies exploited loopholes in the GST system causing huge revenue losses.

From April to October 2024, GST officers used advanced data analytics and intelligence tools to identify the fake entities and their operations. A special drive conducted between August 16 and October 30 helped the crackdown.

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So far, 69 individuals connected to the fraud have been arrested. Authorities have blocked ITC worth Rs.5,422 crore and recovered Rs.1,062 crore from fraudulent claims. Bank accounts associated with the fake firms were frozen and properties were seized to recover dues.

The government has promised to take strong action against tax fraud to protect honest taxpayers and ensure a fair tax system. In the announcement, officials praised the use of technology and teamwork between central and state tax departments to uncover the fraud.

The government also said these efforts are meant to discourage others from attempting similar scams and to ensure that businesses following the rules are not unfairly affected.

This case is a clear warning for businesses to follow GST rules. Those who break the law risk severe fines, criminal charges, and damage to their reputation.

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