Government Cracks Down on 29,273 Bogus Firms Evading ₹44,015 Crore in Taxes Since May

New Delhi: In a significant move to tackle tax evasion, the government has uncovered 29,273 fictitious firms since May, defrauding the exchequer of an alarming ₹44,015 crore. Haryana leads the pack in fake firms per lakh among entities registered with the Goods and Services Tax authorities, with Delhi, Rajasthan, and Maharashtra following closely.

Key Findings:

1. Regional Discrepancies:

   • Haryana tops the list for fake firms per lakh (81), followed by Delhi (61), Rajasthan (59), and Maharashtra (54).
   • Maharashtra records the highest number of bogus firms for input tax credit (926).

2. Tax Evasion Hotspots:

   • Delhi leads in the total amount suspected to be in the category of tax evasion, amounting to ₹3,028 crore in the quarter ended December.
   • Maharashtra follows closely with ₹2,201 crore, while Uttar Pradesh is in third place with ₹1,645 crore.

3. Enforcement Actions:

   • Maximum arrests made in Delhi and Maharashtra (11 each) during the period.
   • The government contemplates advanced risk profiling using technology to pre-empt frauds and block suspected claims.

4. Special Drive Impact:

   • Since the special drive against fake registrations commenced in mid-May 2023, a total of 29,273 bogus firms involved in suspected Input Tax Credit (ITC) evasion have been detected.
   • The drive has saved ₹4,646 crore, with ₹3,802 crore blocked by blocking ITC and ₹844 crore recovered. A total of 121 arrests have been made.

5. Quarterly Figures:

   • In the quarter ended December, 4,153 bogus firms involving suspected ITC evasion of around ₹12,036 crore were detected.
   • Central GST Authorities discovered 2,358 of these bogus firms, protecting revenue of ₹1,317 crore, with ₹319 crore realized and ₹997 crore protected by blocking ITC. 41 persons were arrested.

6. Government Measures:

   • Various measures have been taken to strengthen the indirect tax registration process, including pilot projects of biometric-based Aadhaar authentication at the time of registration.
   • Sequential filing of GST returns, system-generated intimation for reconciliation, and the use of data analytics are among the government's efforts to curb tax evasion.

The government's proactive stance against fake firms aims to enhance compliance and protect the revenue stream. The ongoing drive underscores the significance of advanced risk profiling and technological interventions to fortify the taxation system against fraudulent practices.