The government has identified 489 fake GST registrations linked to forged PAN and Aadhaar details until October this year, which resulted in tax evasion of more than ₹3,000 crore, Parliament was told on Monday, 15 December.
In the 2024-25 fiscal year, 3,977 fraudulent GST registrations were detected using forged PAN and Aadhaar, leading to an evasion of ₹13,109 crore. In 2023-24, 5,699 similar fraudulent registrations were identified, resulting in tax evasion of ₹15,085 crore, as per a written reply by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha.
How many have been arrested?
From April to October this year, GST officers arrested 16 individuals. In FY 2024 and FY 2025, the arrests totalled 50 and 67, respectively.
The government's action
Chaudhary further informed that the Directorate General of Analytics and Risk Management (DGARM) has started an exercise to identify anomalies in digital information provided by the proprietorship firms at the time of GST registration.
In addition, DGARM also concentrates on identifying risky taxpayers who are solely set up for fake or bogus invoicing and passing on ineligible ITC in the supply chain, he said.
Two special drives were launched across India for the periods 16 May 2023 to 14 August 2023 and 16 August 2024 to 30 October 2024. These initiatives, conducted by both Central and State tax authorities, aimed to coordinate efforts to combat fake registrations and fraudulent ITC claims.
“The drive against non-existent/ fake registrations involved physical verification of the business premises of the taxpayers by duly constituted teams of tax officials. During this special drive, non-existent GSTINs were identified and suspended/cancelled,” Chaudhary said.
What must GST registration applicants know?
Biometric Aadhaar authentication, utilising data analytics and risk parameters, has been adopted across the country for processing GST registration applications.
All applications are assigned a risk rating generated by the system, which is based on data analytics and risk parameters. These ratings are provided to CBIC field formations to facilitate proper verification and subsequent processing of applications.
Providing bank account details during registration is mandatory. The account must be in the registered person's name, linked to their Permanent Account Number (PAN). For proprietorship firms, it should also be connected with Aadhaar. Additionally, bank details must be submitted within 30 days of registration or before filing the outward supplies statement.
Provision has been made for the system-based suspension of the registration of individuals who do not furnish valid bank account details within the prescribed timeframe. Registrations are suspended by the system on the portal if returns are not filed for six months.
To prevent granting fake registrations, the authenticity of the documents provided as proof of address is cross-verified using publicly available sources, such as the websites of relevant authorities, land registries, electricity distribution companies, municipalities, and local bodies.
