GST Officers Uncover ₹15,851 Cr False ITC Claims, Involving 3,558 Fake Firms

Fake Tax Credit Claims: The Goods and Services Tax (GST) have found false tax credit claims totalling Rs 15, 851 crore in April-June quarter of this financial year, 29 per cent higher than the sam period year ago, even after the deduction of such claims was less year-on-year (YoY).

The overall number of firms involved in such fradulent activities detected by both state and central GST officers are 3,558, which is less than 3,840 entities detected in the same quarter of fiscal year 2025.

A panel of state finance ministers, chaired by Goa CM Pramod Sawant, is presently focused on tax evasion in several sectors and is on the look out to check input tax credit (ITC) fraud via mutliple ways.

Reprtedly, about 1,200 fake firms on average are getting detected every month. The number of fake firm detections in the quarter ended-June period is less compared to last year.

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As per the data of the fake firms and ITC frauds detected by central and state GST officers during the June quarter of FY26, Rs 15,851 crore worth ITC was found to have been fraudulently passed involving 3,558 fake firms. During the period, 53 indiviuals have been arrested by GST officers and Rs -659 crore recovered.

In Q1 of FY25, GST officers had detected Rs 12,304 crore fake ITC involving 3,840 fake firms. Rs 549 crore was recovered, and 26 persons were arrested.

Under the Goods and Services Tax (GST) regime, ITC refers to the taxes paid by businesses on purchases from suppliers. This tax can be claimed as a credit or deduction at the time of paying the final output tax.

Dealing with fake ITC has been a major challenge for the GST administration as unscrupulous elements were creating fake firms just to claim ITC and defraud the exchequer.

During 2024-25, GST officers have detected 25,009 fake firms involved in fraudulently passing input tax credit (ITC) worth ₹61,545 crore.