Introduction: The Ministry of Finance, through its premier investigative agency, the Directorate General of GST Intelligence (DGGI), has been on the front lines in the battle against fake Input Tax Credit (ITC) and GST evasion. This article sheds light on the remarkable efforts of DGGI in detecting and combating fraudulent ITC claims, ultimately safeguarding the government’s revenue.
Since November 2020, DGGI has launched a Special Drive aimed at curbing the practice of claiming fake ITC. The objective is to prevent revenue leakage, and their dedication to this cause has yielded significant results. From April 2020 to September 2023, DGGI has identified more than 6,000 cases of fraudulent ITC, involving a staggering sum of over Rs. 57,000 crore in GST evasion. To combat this, they have arrested a total of 500 individuals involved in these malpractices.
A noteworthy shift occurred in June 2023, when DGGI intensified its efforts to expose and apprehend the masterminds behind these tax evasion schemes. These fraud syndicates operate nationwide, employing various tactics to achieve their illicit objectives. To detect and dismantle these networks, DGGI has employed data analysis techniques supported by advanced technical tools. This approach has led to the apprehension of numerous tax evaders.
One common tactic used by these syndicates involves manipulating gullible individuals by enticing them with promises of jobs, commissions, bank loans, and more. Once these individuals are lured in, their Know Your Customer (KYC) documents are surreptitiously obtained and used to create fake or shell companies without their knowledge or consent. In other cases, KYCs are used with the active involvement of the concerned individuals, who are compensated with small financial incentives.
In the current fiscal year, 2023-24, DGGI has already identified a total of 1,040 cases of fake ITC, amounting to Rs. 14,000 crore. Notably, they have apprehended 91 fraudsters involved in these cases to date.
To effectively combat GST evasion, DGGI utilizes advanced data analytics tools to develop intelligence, especially in emerging areas of tax evasion. They also leverage their extensive intelligence network across the country to gather crucial information. In the broader context of fiscal year 2023-24, the DGGI has detected a staggering Rs. 1.36 lakh crore in overall GST evasion, which encompasses fake ITC cases. It is significant to note that voluntary payments of Rs. 14,108 crore have been made to rectify this evasion.
Conclusion: The Directorate General of GST Intelligence, under the Ministry of Finance, plays a pivotal role in safeguarding government revenue by combatting GST evasion and fake ITC claims. Their relentless efforts and use of advanced tools and techniques have led to the identification and apprehension of those involved in these fraudulent activities. These actions are crucial in ensuring a fair and transparent taxation system, ultimately benefiting the Indian economy as a whole.
Ministry of Finance
In fight against fake ITC, DGGI detects more than 6,000 fake ITC cases involving more than Rs. 57,000 crore GST evasion with the arrest of 500 persons between April 2020 to September 2023
In FY23-24, DGGI detects Rs. 1.36 lakh crore overall GST evasion involving voluntary payment of Rs. 14,108 crore
Posted On: 18 OCT 2023
Being the premier Intelligence and Investigating Agency of GST tax evasion across the country, the Directorate General of GST Intelligence (DGGI) had initiated a Special Drive against the practice of claiming fake Input Tax Credit (ITC) to plug the leakage in Government revenue from November, 2020, and continues to check ITC evasion actively. From April 2020 to September 2023, more than 6,000 fake ITC cases involving more than Rs. 57,000 crore GST evasion has been detected and a total of 500 persons have been arrested.
Since June 2023, DGGI has laid special emphasis to identify and apprehend the masterminds and disrupting syndicates, operating across the country. Cases have been unraveled using data analysis aided by advanced technical tools which has lead to the arrest of tax evaders. These tax syndicates often use gullible persons and enticed them with job / commission / bank loan etc. to extract their KYC documents which were then used for creation of fake / shell firms / companies without their knowledge and consent. In some cases, KYCs were used with the knowledge of the concerned person by paying them small pecuniary benefits. In the current Financial Year 2023-24, a total of 1,040 fake ITC cases involving Rs. 14,000 crore has been detected with a total of 91 fraudsters have been apprehended till date.
In order to tackle the menace of GST evasion, the DGGI develops intelligence, especially in new areas of tax evasion, through advanced tools for data analytics besides using its intelligence network across the country to collect such information. Overall in FY2023-24, Rs. 1.36 lakh crore has been detected as overall GST evasion (including fake ITC) and voluntary payment of Rs. 14,108 crore has been made for the same.