Massive Rs 15,851 Crore GST Fraud: 3,558 Fake Firms Busted

GST officers have exposed a massive Rs 15,851 crore fake input tax credit (ITC) scam in the April-June quarter of FY26, a 29% jump from Rs 12,304 crore in the same period last year. The crackdown revealed 3,558 fake firms, down from 3,840 in Q1 FY25, indicating success in curbing fake GST registrations.

The fraudulent firms passed fake ITC, a tax credit claimed on business purchases. Authorities arrested 53 individuals and recovered Rs 659 crore, compared to 26 arrests and Rs 549 crore in Q1 FY25. “Monthly detections average 1,200 fake firms, and the decline shows our anti-fraud drive is effective,” an official said.

A panel, led by Goa Chief Minister Pramod Sawant, is investigating sector-specific tax evasion and ITC fraud. In FY24-25, 25,009 fake firms were linked to Rs 61,545 crore in ITC fraud. Nationwide drives in 2023 (May-July) and 2024 (April-October) uncovered 21,791 and 18,000 fake entities, with tax evasions of Rs 24,010 crore and Rs 25,000 crore, respectively.

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Stringent GST registration measures, including Aadhaar authentication and physical verification for risky applicants, have been implemented. The GST Act imposes strict penalties, such as arrests, registration cancellations, ITC blocking, and property attachment, to recover government dues and deter fraudsters.

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