CBIC’s Second Nationwide Drive Exposes ₹26,543 Crore GST Evasion
Date: December 19, 2024
Category: GST Recent News
Read Time: 4 Minutes
The Central Board of Indirect Taxes and Customs (CBIC) has unearthed a massive GST evasion of ₹26,543 crore during its second nationwide drive against fake input tax credit (ITC). The operation, which began on August 16, scrutinized 68,903 high-risk taxpayers, revealing that nearly 27% (18,472 entities) were bogus.
Key Findings of the Drive
Extent of Fraud Detected
- Total Evasion: ₹26,543 crore in GST.
- Bogus Entities Identified: 18,472 out of 68,903 taxpayers.
- Regions with Maximum Fraud: Maharashtra, Gujarat, and Delhi reported the highest number of cases.
Challenges in Recovery
- Utilised ITC: Fraudulent ITC is often utilised before the fraud is discovered, which limits recovery efforts.
- Average Fraud: ₹1.5 crore per fake entity.
Pending Verifications
Out of the 74,070 risky taxpayers flagged, approximately 5,000 cases remain to be verified:
- Delhi: 3,300 cases pending.
- Maharashtra: 765 cases delayed, reportedly due to state elections.
The flagged list was generated by the GST Network (GSTN), and states contributed through local intelligence.
Second Drive in Context
The second operation follows the success of the first drive (May 14–July 14). During that drive, 77,200 entities were verified, and 20,800 entities were identified as bogus.
Expected Next Steps
The findings from this drive will be presented at the GST Council meeting on December 21, 2024. The Council is likely to:
- Discuss Compliance Measures: Introduce stricter regulations to prevent fake invoicing and ITC fraud.
- Strengthen Verification Processes: Focus on states with higher instances of fraud.
- Leverage Technology: Enhance the GSTN’s tools for identifying high-risk taxpayers.
Implications for GST Compliance
This large-scale fraud emphasizes the need for robust compliance mechanisms. Therefore, regular audits and verifications become critical. Additionally, enhanced inter-state coordination and stricter penalties for fake ITC claims are essential to maintaining a fair GST ecosystem.
The CBIC’s continued efforts aim to safeguard government revenue while ensuring fair practices for compliant taxpayers.
