India has launched a recent crackdown in a number of states to curb the rate of Input Tax Credit (ITC) evasion and fraudulent registrations related to Goods and Services Tax (GST).
The country is running a pilot for biometrics-based Aadhaar authentication in three states as part of a move to curb these tax registration irregularities, which have a heavy toll on the country’s tax revenue collection, Deccan Herald reports.
The states involved in the pilot which began in November 2023 are Andhra Pradesh, Gujarat and Puducherry.
In an eight-month operation aimed at tracking those involved in the fraudulent activity, GST officers are reported to have found over 29, 000 firms involved in fraud claims, amounting to over 440 billion Indian rupees (approximately US$5.29 billion).
The drive against fake tax registration during the eight months of the campaign enabled authorities to save an overall amount of Rs 46.5 billion ($555.3 million) through recovery and the blocking of ITCs, the report notes.
In the last quarter of 2023 (October to December), for example, the campaign identified 4,153 firms that were involved in alleged ITC evasion of around Rs 120 billion ($1.4 billion).
The most irregular tax situations were found in state of Maharashtra, at 926 firms, followed by Rajasthan, Delhi, and Haryana.
As part of the crackdown, dozens of individuals suspected to be complicit in the ITC evasion or fraudulent registration cases were arrested, and they are expected to answer for their crimes in front of the competent state services.
In the face of the growing phenomenon of tax evasion and other tax-related fraud, the government says it is taking other measures beyond biometric authentication, including the use of data analytics, to detect and deal with suspected cases.
Article: India counts on Aadhaar authentication to reduce tax registration fraud