Even as tax authorities plan to plug loopholes to tighten compliance for goods and services tax (GST), they have already identified nearly 15,000 entities and have detected evasion of more than Rs 38,000 crore over the years. This includes fraudulent cases of GST registration by misusing PAN and Aadhaar details of other people to claim Input Tax Credit as well as identification of bogus entities.
The central GST administration booked as many as 5,070 cases of fraudulent GST registration through misuse of PAN and Aadhaar details of other people to claim ITC between July 1, 2017, and June 30. As much as Rs 27,246.16 crore of evasion was detected in these cases, of which Rs 922.58 crore was recovered and 331 arrests were made.
Additionally, 9,369 bogus entities were identified with regard to businesses suspected of fraudulent activity and claiming fake ITC involving Rs 10,902 crore. Recovery of Rs 45 crore was made and seven arrests were made in these cases.
The information was provided by Minister of State of Finance Pankaj Chaudhary in Lok Sabha on Monday in response to a question on fraudulent cases of GST registration.
“Based on the recommendations of GST Council, sub-rule (4A) has been inserted in rule 8 of CGST Rules, 2017, to provide for risk-based biometric-based Aadhaar authentication of registration applicants and project is being undertaken on a trial basis in three States and Union Territories. Further, Goods and Services Tax Network (GSTN) has made active the functionality of geocoding the address of the principal place of business of the registrants,” Chaudhary said on whether the Central Board of Indirect Taxes and Customs is planning to implement biometric authentication and geo-tagging of risky entities under GST in the country.
To crack down on GST evaders, the CBIC had also carried out a special all-India drive to weed out fake registrations from between May 16 and July 15.
The GST Council in its 50th meeting earlier this month also took a number of measures to cut down on fake entities and evasion including a requirement that the details of bank account will be have to be furnished within 30 days of grant of registration or before filing of GSTR-1.
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