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The Centre has detected Goods and Services Tax evasion of about Rs 7.08 lakh crore in the last five years, including input tax credit fraud of Rs 1.79 lakh crore, the finance ministry informed Lok Sabha on Monday.
Over Rs 7.08 lakh crore in GST evasion detected in five years, with Rs 1.79 lakh crore from ITC fraud, the Finance Ministry told Lok Sabha. FY25 alone saw Rs 2.23 lakh crore evasion. Govt cites steps like e-invoicing and risk-based audits to curb fraud and improve compliance.
Of the total GST evasion between FY21 and FY25, Rs 1.29 lakh crore tax has been voluntarily paid by taxpayers, minister of state for finance Pankaj Chaudhary told the Lok Sabha.
The GST evasion, which was Rs 49,384 crore in FY21, rose to Rs 2.3 lakh crore in FY24 and stood at Rs 2.23 lakh crore in FY25. The value of ITC fraud cases also rose from Rs 31,233 crore in FY21 to Rs 58,772 crore in FY25.
To be sure, part of the disputed tax amounts get dropped in appellate proceedings, while some of the demands are challenged in courts.
The increase in tax evasion detected coincides with an expansion of data collection and reporting requirements implemented by the tax administration. The Centre and Goods and Services Tax Network, the company that processes tax returns, have taken several steps to improve compliance and prevent tax evasion, the minister said.
These include e-invoicing transactions, automated risk assessment of entities based on their compliance attributes, highlighting outliers based on system-flagged mismatches, identifying anomalies in taxpayer behaviour, and selecting returns for scrutiny and taxpayers for audit based on various risk parameters.
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