look news india
In the first quarter of the current financial year 2025-26, there has been a significant increase of 29 percent of GST theft across the country. Meanwhile, GST officials have detected fake input tax credit theft of Rs 15,851 crore, which is a significant increase compared to the same period last year. It is learned that 3,558 fake companies have been involved in this theft, who have illegally acquired crores of rupees to the treasury by receiving tax credit.
Shell companies’ irregularities and government action
GST officials said that these fake companies were mainly misusing ITC based on fake invoice. Such companies are present only on paper and claim tax credit without doing any real business. The government has tightened the GST registration process to curb such irregularities. Physical verification and base certification has now been made mandatory for risky applicants, while non-risk businesses are registered within 7 days.
In addition, there is a provision for strict action against those making false ITC claims under the GST Act, including cancellation of registration, blocking electronic credit laser and attaching property and bank accounts. During this quarter, 53 people were arrested and Rs 659 crore was successfully recovered.
Comparison from previous years
Last year (2024–25), in the first quarter, GST officials busted 3,840 fake companies, who claimed fake ITC of Rs 12,304 crore. During that time Rs 549 crore was recovered and 26 people were arrested. Despite the low number of fake companies this year, 29 percent increase in the stolen amount is a matter of concern. However, officials say that the number of fake companies has decreased due to the campaign against fake GST registration.
Role and future plans of states
A panel of finance ministers of the states under the leadership of Goa Chief Minister Pramod Sawant is studying tax evasion in various fields and is searching for measures to prevent ITC fraud. An official said, “About 1,200 fake companies are being busted every month. The decrease in the number of fake companies this year shows that the government’s campaign has been successful.
During 2024–25, GST officials busted 25,009 fake companies, who made fake ITC claims worth Rs 61,545 crore. In addition, two major all -India campaigns were carried out. In the first campaign (16 May, 2023 to July 15, 2023), 21,791 fake institutions were busted, which stole a tax of Rs 24,010 crore. The second campaign (April 16, 2024 to October 30, 2024) was busted with 18,000 fake companies, who had stolen tax of Rs 25,000 crore.
Damage to government exchequer and message to citizens
Such irregularities cause huge damage to the government exchequer, which directly affects the development and welfare schemes of the country. The GST officials and the government are constantly taking strict steps against such fraud, using modern techniques such as data analytics and big data. There is an appeal to the citizens to maintain transparency in GST registration and tax compliance and inform the concerned authorities about any suspected irregularity.
