In the year-long crackdown on tax evasion, the Goods and Services Tax (GST) authorities have unearthed over Rs 35,000 crore of tax fraud committed by misuse of input tax credit (ITC) provision under the GST regime. 

During the 2020-21 financial year, the CGST zones and the Directorate General of GST Intelligence (DGGI) had booked about 8,000 cases, involving fake ITC of over Rs 35,000 crore, a statement from the CBIC said. 

Under the GST regime, at the time of paying tax on output, entities can reduce the tax they have already paid on inputs. Some have, however, misused the provision by creating fake invoices on inputs. 

“Misuse of the beneficial provision of ITC under the GST regime is the most common modus of evasion under the GST law,” the statement said. “The field formations of the Central Board of Indirect Taxes and Customs (CBIC) have been regularly detecting such cases from the very beginning of the GST regime,” the statement added. 

During 2020-21 (April 2020 to March 2021), 426 persons, including 14 professionals, such as CAs, lawyers and directors, were arrested. “Considering the high proportion of fake ITC availment and utilisation, a nationwide special drive against the fake GST invoice was launched with effect from November 9, 2020 which is still continuing,” it said.