"₹41664 Crores ITC Fraud Via Non-Existing Entities, Fake Invoices": Centre Flags Rising GST Evasion In Rajya Sabha

The Centre has acknowledged a sharp rise in GST evasion and Input Tax Credit (ITC) frauds, where bogus or dummy entities were found to be used as fronts for fake invoicing. In a tabulated scale of Fake Invoicing Cases, the Centre has put forth number of cases registered and corresponding detection amount by Central tax formations during 2022-23, 2023-24 with the Financial Years 2024-25 and 2025-25 (upto October 2025) witnessing 15283 and 24109 cases. The statistics indicate that ₹7.5 crore ITC frauds were carried out in the pharmaceutical sector through inactive firms.The total amount of ITC fraud stands at a staggering ₹41,664 crores till October 2025 for the present financial year. To curb GST evasion, at the outset, the Finance Ministry put forth that the Offence of fraudulent availment of ITC without invoice or bill is now a cognizable and non-bailable offence. In this vein, it was highlighted that system measures taken by the Government to prevent and tackle the cases of Fake Invoicing include strengthening Registration Norms by Automatic Registration Suspension, Automated notices under Rule 88C/88D were issued, Invoice & Return Controls by allowing ITC only on invoices filed in GSTR-1 and reflected in GSTR-2B and “A registered person is not allowed to furnish FORM GSTR-1, if he has not furnished return in FORM GSTR-3B for the preceding tax period” It was also pointed out that Multiple systemic, legal, and enforcement measures have been rolled out like introduction of Invoice Management System, E-Invoicing, OTP-based PAN verification, Submission of mandatory Valid Bank Account Details within 30 days, Risk-based biometric Aadhaar authentication, Geo-tagging of place of business. As for Deficiencies in GST E-way Bill System, the Centre noted systemic deficiencies in E-way Bill system under the Goods and Services Tax mechanism. The Centre has clarified on corrective measures like disallowing use of the same document number with the same date for generating more than one E-Way Bill. Further, E-way Bill generation was blocked for non-filers. It was also ensured that documents older than 180 days are not allowed for E-Way Bill generation, the Centre clarified. Click here to read answer by the Minister of State, Ministry of Commerce and Industry, on GST Theft By Sleeping Modules. Click here to read answer by the Minister of State, Ministry of Commerce and Industry, on Deficiencies in GST e-way bill system.

"₹41664 Crores ITC Fraud Via Non-Existing Entities, Fake Invoices": Centre Flags Rising GST Evasion In Rajya Sabha

Parul Bose

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