In the wake of unearthing multiple ITC scams valued at over Rs 3,000 crore in recent years, the Telangana state commercial taxes department is set to intensify checks on all GST-registered businesses, with a sharper focus on high-value dealers.
The state currently has around 5.5 lakh GST-registered dealers, of which nearly two lakh report annual turnover exceeding Rs 1.5 crore - 50,000 registered under Central GST and 1.5 lakh under State GST. Officials said that dealers with annual transactions above Rs 10 crore will now face enhanced scrutiny.
Under the new measures, the GST registration process will be made more rigorous, including detailed vetting of applications and physical site inspections where necessary. Authorities will also strengthen monitoring of Integrated GST (IGST) transactions and closely verify ITC claims made by large businesses.
To curb fraudulent activities, the department plans to deploy technology and advanced data analytics to flag suspicious cases for review. Special ITC audits are also on the agenda.
ITC fraud typically involves creating fake firms and issuing bogus invoices without any actual supply of goods or services, enabling fraudsters to claim GST credit they never paid and evade tax. For instance, a genuine dealer buying goods worth Rs 100 and paying Rs 18 GST can offset this against Rs 27 GST collected on selling them for Rs 150, remitting only Rs 9 to the government. In fake invoice cases, however, no real goods change hands, but the fraudulent tax credit is still claimed, depriving the exchequer of revenue.
Officials stressed that the crackdown is aimed at plugging revenue leakages and ensuring genuine businesses operate on a level playing field. "These measures will make it harder for tax evaders to exploit loopholes," a senior official stated.
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