Haryana tops the list of fake firms per lakh among entities registered.
With the Goods and Services Tax authorities, followed by Delhi, Rajasthan and Maharashtra, according to official data on action taken against bogus firms in the December quarter, even as a special drive since May detected 29,273 fictitious firms defrauding ₹44,015 crore.
While the largest number of bogus firms incorporated for input tax credit was detected in Maharashtra (926), in terms of fake firms per lakh, Haryana emerged number one (81), followed by Delhi (61), Rajasthan (59) and Maharashtra (54), according to finance ministry data released on Sunday.
In terms of total amount suspected to be in the category of tax evasion, Delhi emerged at the top with ₹3,028 crore in the quarter ended December, followed by Maharashtra ( ₹2,201 crore) and Uttar Pradesh ( ₹1,645 crore). The maximum number of arrests were made in Delhi and Maharashtra (11 each) during this period.
ITC frauds are rampant by elements who use bogus firms to generate fake invoices and defraud the exchequer without actually delivering goods or services, HT reported on January 5. The government is considering more intense technology based advance risk profiling to pre-empt such frauds and block suspected claims, which was estimated at over ₹4 lakh crore in the past four years, with less than 30% recovery rate, the report said.
To curb these frauds and increase compliance, GST officials under the Central Board of Indirect Taxes and Customs and states are carrying out a drive on the issuance of fake invoices without any underlying supply of goods and services, the finance ministry said in a statement on Sunday.
“Since the initiation of the special drive against fake registrations in mid-May 2023, a total of 29,273 bogus firms involved in suspected Input Tax Credit (ITC) evasion of ₹44,015 crore have been detected. This has saved ₹4,646 crore, of which ₹3,802 crore is by blocking of ITC and ₹844 crore is by way of recovery. So far, 121 arrests have been made in the cases,” it said.
In the quarter ended December, 4,153 bogus firms that involved suspected ITC evasion of around ₹12,036 crore were detected, it said. “2,358 of these bogus firms were detected by the Central GST Authorities. This has protected revenue of ₹1,317 crore of which Rs. 319 crore has been realised and ₹997 crore has been protected by blocking ITC. 41 persons were arrested in these cases. 31 of these arrests were by Central GST Authorities,” the ministry said.
The government has taken various measures to strengthen the indirect tax registration process. Pilot projects of biometric- based Aadhaar authentication at the time of registration have been launched in Gujarat, Puducherry and Andhra Pradesh.
“Besides, the government has endeavoured to curtail evasion of tax through measures such as sequential filing of GST returns, system generated intimation for reconciliation of the gap in tax liability in GSTR-1 & GSTR-3B returns and of the gap between ITC available as per GSTR-2B and ITC availed in GSTR-3B returns, use of data analytics and risk parameters for detection of fake ITC, etc,” the finance ministry said.