• Notification Date: 10-02-2024
• Notification No: N/A

Delhi Tops the List of GST Evasion Cases by Bogus Firms in the Third Quarter

Delhi has earned the dubious distinction of having the highest amount of goods and services tax (GST) evasion by bogus firms in the third quarter of 2023-24 financial year. 
According to officials, between Oct and Dec 2023, 483 bogus firms were busted in the capital, which were involved in suspected GST evasion of Rs 3,028 crore. Delhi was third only to Maharashtra (926) and Rajasthan (507) in the number of bogus GST firms that were detected by the authorities in the third quarter of FY24. 

They, however, added that the suspected amount of GST evasion in Maharashtra and Rajasthan was estimated at Rs 2,201 crore and Rs 197 crore only, respectively. 
GST formations, under the Central Board of Indirect Taxes and Customs, and respective state and union territory govts have been carrying out a drive since May 2023 to identify bogus registrations and issuance of fake invoices without any underlying supply of goods and services. 
In the quarter ending Dec 2023, a total of 4,153 bogus firms that involved in suspected input tax credit evasion of around Rs 12,036 crore were detected across the country and 41 arrests were made. In Delhi, the authorities managed to block input tax credit of Rs 90 crore and made arrests of 11 people involved in the fraud. 

In terms of estimated GST evasion, Delhi is followed by Maharashtra, Uttar Pradesh (Rs 1,645 crore), Andhra Pradesh (Rs 765 crore) and Haryana (Rs 624 crore). 
Since the initiation of the special drive, a total of 29,273 bogus firms involved in suspected ITC evasion of Rs 44,015 crore have been detected across the country. 
While no reaction was available from the office of finance minister Atishi, the officials of the trade and taxes department claimed that measures were being taken to check the entry of fake firms in the GST network. 
“We have set up a centralised GST registration cell to receive and process new applications. This has helped in bringing down the number of deemed registration of firms and thus restricted the entry of bogus trading firms, curbing GST evasion and subsequent revenue loss to the government,” said an official, requesting anonymity. 
Of the 1.46 lakh applications received from new companies for registration with the trade and taxes department in 2022-23, nearly 50,000 got “deemed approval”, which, in simpler terms, mean that they managed to get the GST registration without manual scrutiny of documents, as the officials could not complete the verification process within the stipulated seven days.