The Goods and Services Tax authorities have unearthed over ₹ 31,000 crore of tax fraud committed by misuse of input tax credit (ITC) provision under the Goods and Services Tax (GST) regime during the financial year 2020-21 and booked more than 7,200 cases involving fake ITC. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.

Giving details, the Minister stated Input Tax Credit (ITC) fraud detected by CGST formations under Central Board of Indirect Taxes & Customs (CBIC) as following:

The Minister stated that the Government has taken many steps to prevent such frauds, such as:

• Introduction of AADHAR authentication for processing of new registration application;
• Facility to verify cancelled / existing registrations of the applicants seeking new registrations;
• Provisions to suspend / cancel registration of taxpayers found to the adverse notice of the department;
• Bulk suspension of registration by GSTN based on business intelligence and further follow up of the same by the CBIC;
• Additional grounds for cancellation of registration have been introduced where there is mismatch between FORM GSTR-1 and FORM GSTR 3B (Rule 21) of CGST Act, 2017, etc.;
• To prevent fake dealers and shell companies to pass on fake credit, without filing their GSTR-3B returns and paying taxes, a provision has been made to block furnishing of outward supply statement in FORM GSTR-1 by a taxpayer, if 2 or more GSTR 3B returns are not filed by the said taxpayer.
• E-invoices have been made mandatory for all B2B transaction with turnover above ₹ 50 crore.
• Generation of E-way bill by those taxpayers who have not furnished return for consecutive period of two month has been restricted.
• Blocking of ITC Credit under Rule 86A of CGST Act, 2017, was introduced if the proper officer has reason to believe that ITC has been availed fraudulently.