November 5, 2024: Tax authorities have exposed approximately 18,000 bogus companies registered under the Goods and Services Tax (GST), involved in tax evasion totaling ₹25,000 crore, according to official sources. In a comprehensive national crackdown, tax officers conducted extensive verifications and discovered numerous entities exploiting input tax credit (ITC) provisions without conducting actual business.
“We had identified around 73,000 GST Identification Numbers (GSTINs) for verification in the second all-India drive. Out of these, 18,000 were found to be non-existent,” an official shared with PTI, highlighting the massive scale of the fraud. These companies were allegedly set up solely to claim ITC, costing the government over ₹24,550 crore in lost revenue.
This operation, which began on August 16 and concluded at the end of October, is part of the government’s ongoing efforts to clamp down on tax fraud. During the special drive, around ₹70 crore in voluntary GST payments were recovered from companies, a move that underscores the government’s commitment to enforcing compliance through physical verifications and targeted actions.
The recent campaign follows a similar drive conducted from May to July 2023, in which 21,791 non-existent GST entities were identified, linked to suspected tax evasion of ₹24,010 crore. As the government ramps up efforts to detect fraud, businesses are facing closer scrutiny to ensure that input tax credits are used appropriately and that only legitimate businesses benefit from tax incentives.
The discovery has raised questions about the vulnerability of GST registration to misuse and highlighted the importance of continued vigilance and verification to protect the exchequer.
