GST Evasion Happening: How Fake tax credit Claims Increasing In the Market?

Fake ITC Claims are increasing every day raising questions about the GST structure in India. The country records the highest number of fake tax credit or ITC (Input Tax Credit) claims from Gujarat and West Bengal. Apart from that, Haryana and Delhi have the highest amount of involvement in such fake claims. We will share more details about this ongoing Fake Tax Credit scam in the market. Why it is taking GST structure into question? Why it is not good for the economy? Let us discuss below.

Fake Tax Credit Claims Are Increasing Over The Time In India

Fake ITC Claims have risen in number. The financial year 2022-23 records 1,940 cases amounting to Rs. 13,175 crore. However, you will be shocked after reading the percentage of increase in a year itself. The sources report that there is almost a 49% increase in such cases. This is why, the financial year 2023-24 is recording 1,999 cases amounting to Rs. 19,690 Crore. The states having the most involvement in such cases are Gujarat and West Bengal. They have almost 55% of total fake ITC cases. Haryana and Delhi are at the top in terms of the amount. They have only 15% of the total cases. However, the amount involved in these cases is Rs. 10,851 crore out of Rs. 19,690 crore.

How Do These Fake Claims Take Place?

These fake claims often start with creating fake invoices. Thus, the goods and services are not transacted. It’s just on the bills to claim the return. It leads to an effect on different industries and areas. The GST authorities are trying harder to find solutions for such cases. However, there are no details about the same yet. They are still working on finding alternatives to avoid this problem. The amount involved in these fake claims often remains unrecovered as it’s a long verification process of cases. The authorities keep on checking regularly for such claims.

There are several arrests under these cases. From the 1,940 cases in the previous year, there were only 68 arrests. The amount of Rs. 1,597 crore gets recovered from Rs. 13,175 Crore. Apart from that, there were 105 arrests this financial year. Around Rs. 2,504 crore is recovered from Rs. 19,69 crore. However, there were 1,999 cases in total. The issues are going on. GST helped in preventing the supply of black money. However, the system still has some loopholes that they are working to fulfill soon. We want to clear that the above-mentioned figures and data were from the Directorate General of GST Intelligence only. There are some cases under central and state GST authorities as well, remaining without a clue.