The GST officers have busted a nexus of more than 30 fake firms, who have availed ineligible input tax credit (ITC) of over Rs 50 crore, the Finance Ministry said on Wednesday.
In an ongoing two-month-long special drive against fake registration, the Central GST Delhi West Commissionerate found multiple entities registered on the same address. During investigation, it was found that the said address was existent but the owner of the premises denied any knowledge about the existence of any firm.
In a statement, the Finance Ministry said searches were undertaken at multiple locations in Delhi and it was found that a person named Shiva has been obtaining KYC credentials from people on the pretext of getting loans sanctioned for them.
"Further search revealed that Shiva has created more than 30 fake firms and sold them in cash at a premium. He also stated that to avoid physical verification, he used AADHAR authentication to obtain these GST registrations," the ministry said.
These multiple firms were found to have availed/passed on ineligible ITC of more than Rs 50 crore, it added.
The GST officers are taking steps to prevent future cases of ITC fraud. These steps include:
- Increasing data analytics to identify suspicious transactions.
- Conducting physical verification of GST registrations.
- Raising awareness of ITC fraud among businesses.
The government is also working to improve the GST system to make it more difficult to commit ITC fraud. These measures include:
- Linking GST registrations with Aadhaar numbers.
- Introducing a system of e-invoicing.
- Strengthening the enforcement of GST laws.
The ITC fraud of Rs 50 crore is a serious case, but the government is taking steps to prevent future cases and to improve the GST system.
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