Tax authorities have uncovered approximately 10,700 fake GST registrations, involving tax evasion worth ₹10,179 crore, during an ongoing all-India drive against fraudulent companies, a senior official from the Central Board of Indirect Taxes and Customs (CBIC) announced.
Shashank Priya, CBIC member, revealed that Aadhaar authentication for GST registrations is already active in 12 states and will expand to four more states by October 4, eventually covering 20 states, including Madhya Pradesh, Rajasthan, Assam, Tamil Nadu, Uttar Pradesh, and Haryana.
Speaking at an Assocham event, Priya hinted at potential future measures that could impose restrictions on new taxpayers based on risk profiles, including limiting the number of invoices they can issue monthly. "We are pained by the misuse of the system and will use every method available to stop it," he added.
The second nationwide drive, which started on August 16 and runs until October 15, has identified 67,970 GST Identification Numbers (GSTINs) for verification. As of September 22, 39,965 GSTINs (59%) have been verified, with 27% found to be non-existent. This is similar to the findings of the first drive last year, which uncovered 21,791 non-existent entities and suspected evasion of ₹24,010 crore.
The current drive has already led to the detection of ₹10,179 crore in evaded taxes, with ₹2,994 crore in blocked Input Tax Credit (ITC) and ₹28 crore recovered as of late September.
Priya also addressed the issue of data mismatches in GST filings, a significant cause of disputes and show-cause notices (SCNs). In the previous fiscal year, tax authorities issued over 1.12 lakh SCNs, with the majority stemming from data discrepancies between returns like GSTR-1 and GSTR-3B, and issues related to excess ITC and non-payment under the reverse charge mechanism.
Looking forward, Priya mentioned plans to "lock" GSTR-3B after ensuring that all channels of input tax are properly reflected, eliminating the need for post-filing amendments. This could create an ideal compliance environment for both taxpayers and tax administrators. The GSTN is also set to roll out the Invoice Management System (IMS) on October 1, facilitating better invoice matching for taxpayers to ensure correct ITC claims.
As the crackdown on fake registrations continues, the government is committed to using technology and enhanced verification processes to address GST evasion and reduce taxpayer disputes.
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