Lok Sabha Question No. 240 (UNSTARRED), answered on 2024-02-05
Subject: Involvement of Bogus Firms in Evasion of ITC
Ministry: FINANCE
Asked by: Sukanta Majumdar, Raja Amareshwara Naik, Bhola Singh, Vinod Kumar Sonkar

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 240

## TO BE ANSWERED ON MONDAY, 05 th  February, 2024

Magha 16, 1945(Saka)

## Involvement of Bogus Firms in Evasion of ITC

## 240. DR. SUKANTA MAJUMDAR:

SHRI BHOLA SINGH:

SHRI RAJA AMARESHWARA NAIK:

SHRI VINOD KUMAR SONKAR:

## Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  Goods  and  Services  Tax  (GST)  authorities  have  detected 4,153 bogus firms involved in suspected evasion of input tax credit (ITC) worth around Rs. 12,036 crore during October-December 2023 and if so, the details thereof;
- (b)  whether  Maharashtra  is  in  the  top  spot  among  36  States  and  Union Territories  (UTs)  with  the  highest  number  of  926  bogus  firms  with suspected tax evasion of Rs. 2,201 crore and if so, the details thereof;
- (c)  whether this detection has helped in protection of revenue of Rs. 1,317 crore out of which Rs. 319 crore has been realised and Rs. 997 crore has been protected by blocking input tax credit and if so, the details thereof;
- (d)  whether 41 persons have been arrested in these cases so far and if so, the details thereof; and
- (e)  the steps taken/being taken by the Government to prevent such financial crimes in the country?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

*****

- (a)  &  (b)  Yes  Sir.  As  reported  in  the  press  release  issued  by  Ministry  of Finance  on  07.01.2024  (Annexure  1)  4,153  bogus  firms  involved  in suspected  Input  Tax  Credit  (ITC)  evasion  of  Rs  12,036  crore  were detected  in  a  sustained  drive  against  non-existent  tax  payers  by  GST formations across the country during October-December 2023. An amount of Rs. 12,036 Crore (Rs.3,619 Crore (State) + Rs. 8,417 Crore (Centre)) of  fake  ITC  has  been  detected.  In  the  State  of  Maharashtra  926  bogus firms  (282  by  Central  GST  Authorities  +  644  by  State  GST  Authorities) involved in suspected Input Tax Credit (ITC) evasion of Rs. 2,201 crore were detected.
- (c)  &  (d)  Yes  Sir.  This  detection  has  helped  in  protection  of  revenue  of  Rs. 1,317 crore of which Rs. 319 crore has been realised and Rs. 997 crore has been protected by blocking ITC. 41 persons were arrested in these cases.
- (e)  The registration process under GST offers robust checks in the form of physical  verification  of  premises  and  Aadhar  authentication.  The  said checks  have  enabled  in  early  detection  of  fraudulent  registrations  and has also  curbed  fraudulent  registrations  to  a  great  extent. Further  pilot projects of biometric based Aadhar authentication at the time of registration have been launched in the States of Gujarat, Puducherry and Andhra Pradesh to further strengthen the registration process. Besides, to curtail  evasion  of  tax  the  Government  has  taken  measures  such  as sequential filing of GST  returns, system generated intimation for reconciliation of the gap in tax liability in GSTR-1 & GSTR-3B returns and of  the  gap  between  ITC  available  as  per  GSTR-2B  &  ITC  availed  in GSTR-3B returns, use of data analytics and risk parameters for detection of  fake  ITC. To  curb  frauds  in  Goods  and  Services  Tax  (GST)  and increase  compliance,  the  GST  formations,  under  the  Central  Board  of Indirect  Taxes  and  Customs  (CBIC)  and  the  State/UT  Governments, across the country regularly take action to detect and take action against non-existent  /  bogus  registrations  and  issuance  of  fake  invoices  without any underlying supply of goods and service.

*****

## Ministry of Finance

29,273  bogus  firms  involved  in  suspected  Input  Tax  Credit (ITC) evasion of Rs. 44,015 crore detected in a sustained drive against  non-existent  taxpayers  by  GST  formations  across  the country since May 2023; 121 arrested

## Posted On: 07 JAN 2024 6:01PM by PIB Delhi

To curb frauds in Goods and Services Tax (GST) and increase compliance, the GST formations, under the Central Board of Indirect Taxes and Customs (CBIC) and the State/UT Governments, across the country are carrying out a focused drive on the issue of non-existent / bogus registrations and issuance of fake invoices without any underlying supply of goods and services.

Since the initiation of the special drive against fake registrations in mid-May 2023, a total of 29,273 bogus firms involved in suspected Input Tax Credit (ITC) evasion of Rs. 44,015 crore have been detected. This has saved Rs. 4,646 crore of which Rs. 3,802 crore is by blocking of ITC and Rs. 844 crore is by way of recovery. So far, 121 arrests have been made in the cases.

In  the  quarter  ending December, 2023, 4,153 bogus firms that involved suspected ITC evasion of around Rs.12,036 crore were detected. 2,358 of these bogus firms were  detected  by  the  Central  GST  Authorities.  This  has  protected  revenue  of  Rs. 1,317 crore of which Rs. 319 crore has been realised and Rs 997 crore has been protected  by  blocking  ITC.  41  persons  were  arrested  in  these  cases.  31  of  these arrests were by Central GST Authorities. State wise details are annexed.

The  Government  has  taken  various  measures  to  strengthen  the  GST  registration process.  Pilot  projects  of  biometric  based  Aadhar  authentication  at  the  time  of registration  have  been  launched  in  the  States  of  Gujarat,  Puducherry  and  Andhra Pradesh.

Besides,  the  Government  has  endeavoured  to  curtail  evasion  of  tax  through measures such as sequential filing of GST returns, system generated intimation for reconciliation of the gap in tax liability in GSTR-1 & GSTR- 3B returns and of the gap between  ITC  available  as  per  GSTR-2B  &  ITC  availed  in  GSTR-3B  returns,  use ofdata analytics and risk parameters for detection of fake ITC, etc.

## Action against bogus firms during Quarter ending in December 2023

| Name of the State/UT   |   Number of bogus firms detected |   Tax Evasion suspected (Rs Cr.) |   ITC amount blocked / recovered (Rs Cr.) |   Arrests Made |   Fake firms per lakh registered firms |
|------------------------|----------------------------------|----------------------------------|-------------------------------------------|----------------|----------------------------------------|
| Andhra Pradesh         |                               19 |                              765 |                                        11 |              0 |                                      5 |
| Arunachal Pradesh      |                                0 |                               13 |                                        14 |              0 |                                      0 |
| Assam                  |                               19 |                              116 |                                        67 |              0 |                                      8 |
| Bihar                  |                               30 |                              148 |                                        88 |              0 |                                      5 |
| Chandigarh             |                                2 |                                5 |                                         1 |              0 |                                      6 |
| Chhattisgar h          |                               26 |                               83 |                                        34 |              1 |                                     15 |
| Dad. & Ngr Haveli      |                                0 |                                0 |                                         0 |              0 |                                      0 |
| Delhi                  |                              483 |                             3028 |                                        90 |             11 |                                     61 |
| Goa                    |                                4 |                               29 |                                         0 |              0 |                                      9 |
| Gujarat                |                              178 |                              445 |                                        25 |              3 |                                     15 |
| Haryana                |                              424 |                              624 |                                        76 |              3 |                                     81 |
| Himachal Pradesh       |                                4 |                               14 |                                         4 |              0 |                                      3 |
| J&K                    |                                3 |                                1 |                                         0 |              0 |                                      2 |
| Jharkhand              |                               23 |                              110 |                                         2 |              0 |                                     11 |
| Karnataka              |                              223 |                              397 |                                        59 |              2 |                                     22 |
| Kerala                 |                               42 |                              152 |                                         4 |              0 |                                     10 |
| Ladakh                 |                                0 |                                0 |                                         0 |              0 |                                      0 |
| Madhya Pradesh         |                               70 |                              158 |                                        22 |              1 |                                     13 |
| Maharashtra            |                              926 |                             2201 |                                       102 |             11 |                                     54 |

| Manipur           |    0 |     0 |    0 |   0 |   0 |
|-------------------|------|-------|------|-----|-----|
| Meghalaya         |    0 |     5 |    0 |   0 |   0 |
| Mizoram           |    0 |     0 |    0 |   0 |   0 |
| Nagaland          |    0 |     0 |    0 |   0 |   0 |
| Odisha            |  138 |   337 |    7 |   0 |  42 |
| Puducherry        |    2 |     2 |    0 |   0 |   8 |
| Punjab            |   82 |    75 |    4 |   1 |  21 |
| Rajasthan         |  507 |   197 |   31 |   1 |  59 |
| Sikkim            |    2 |     2 |    2 |   0 |  18 |
| Tamil Nadu        |  185 |   494 |  374 |   1 |  16 |
| Telangana         |  117 |   536 |  235 |   1 |  23 |
| Tripura           |    9 |    20 |    0 |   0 |  29 |
| Uttar Pradesh     |  443 |  1645 |   44 |   5 |  24 |
| Uttarakhand       |   66 |    88 |    0 |   0 |  33 |
| West Bengal       |  126 |   343 |   18 |   0 |  17 |
| And. & Nicobar Is |    0 |     0 |    0 |   0 |   0 |
| Lakshadweep       |    0 |     0 |    0 |   0 |   0 |
| Total             | 4153 | 12036 | 1317 |  41 |  29 |

## NB/VM/KMN

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