GST officers bust 25,009 fake firms fraud

New Delhi

Central and state GST officers uncovered 25,009 fake companies involved in fraud during the 2024–25 financial year. These companies fraudulently claimed ₹61,545 crore through input tax credit (ITC), officials confirmed. Authorities recovered ₹1,924 crore by blocking ITC and arrested 168 people linked to the fraud.

Over the past two years (2023–24 and 2024–25), 42,140 fake firms were caught for generating fake ITC worth over ₹1.01 lakh crore. In total, ₹3,107 crore was recovered, and 316 people were arrested.

Officials said several steps have been taken to stop such frauds. These include monitoring suspicious e-way bills, detecting fake GST registrations, and using intelligence inputs. Under GST law, ITC is the tax paid on purchases by businesses, which they can claim later to reduce final tax payments. Fake firms exploit this rule to defraud the government.

To fight this, the GST registration process is now stricter. Non-risky businesses can register in 7 days, but risky applicants face extra checks like Aadhaar authentication and physical verification.

Punishments under the GST Act include cancellation of registration, freezing of bank accounts, and even attaching property. These measures aim to recover tax dues and prevent future fraud.

Two national conferences have been held to guide enforcement officers while ensuring ease of doing business continues.