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Introduction
The Directorate General of GST Intelligence (DGGI), known for its role in combating GST tax evasion, launched a Special Drive in November 2020 to tackle the issue of fake Input Tax Credit (ITC) claims. The objective was to address the leakage in government revenue caused by such fraudulent practices. Since then, the DGGI has been actively detecting and investigating cases of ITC evasion. This article explores the efforts made by the DGGI to identify and apprehend tax evaders, the techniques employed by these syndicates, and the impact on government revenue.
Unveiling the Extent of Fake ITC Cases
From April 2020 to September 2023, the DGGI successfully detected over 6,000 cases of fake ITC, resulting in more than Rs. 57,000 crore of GST evasion. To ensure accountability, the DGGI has arrested 500 individuals involved in these fraudulent activities. The scale of these operations required the DGGI to intensify its efforts further.
Targeting the Masterminds and Disrupting Syndicates
Since June 2023, the DGGI has focused on identifying and apprehending the masterminds behind these fake ITC operations. These syndicates operate across the country, making it crucial for the DGGI to disrupt their activities. Leveraging data analysis and advanced technical tools, the DGGI has successfully unraveled several cases and apprehended tax evaders.
Techniques Employed by Tax Syndicates
Tax syndicates often exploit gullible individuals by enticing them with promises of employment, commissions, bank loans, and other financial benefits. These individuals unknowingly provide their KYC documents, which the syndicates then use to create fake or shell firms without their consent. In some instances, the concerned individuals are aware of the use of their KYC documents, but they receive small pecuniary benefits in return.
Detection and Apprehension in the Current Financial Year
In the ongoing financial year 2023-24, the DGGI has already detected 1,040 cases of fake ITC amounting to Rs. 14,000 crore. This demonstrates the persistence of these fraudulent practices. To combat this, the DGGI has apprehended 91 fraudsters thus far. The efforts to detect and prevent fake ITC cases remain a top priority for the DGGI.
Deploying Nationwide Intelligence Network and Data Analytics
The DGGI utilizes its nationwide intelligence network to gather crucial information related to fake ITC cases. In addition, advanced data analytics technologies play a significant role in producing intelligence, especially in emerging areas of tax evasion. These cutting-edge tools enable the DGGI to stay ahead of the threat posed by GST evasion.
Voluntary Payment and Total GST Evasion
To rectify the GST evasion, the DGGI has received a voluntary payment of Rs. 14,108 crore. This payment contributes to the recovery of a total of Rs. 1.36 lakh crore, including bogus ITC, which has been identified in the fiscal year 2023-24. The voluntary payment demonstrates a commitment towards rectifying the financial impact of these fraudulent practices.
Conclusion
The DGGI's Special Drive against fake ITC claims has proven to be effective in detecting and preventing GST evasion. The extensive use of data analysis and advanced tools has enabled the DGGI to identify and apprehend tax evaders, including the masterminds behind these syndicates. The ongoing efforts of the DGGI are crucial in safeguarding government revenue and ensuring a fair and transparent tax system.
