In the Rajya Sabha, Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, answered Unstarred Question No. 1050 on July 28, 2026, regarding the “Evasion of GST Input Tax Credit”.
The Minister informed the House that Input Tax Credit fraud cases detected by Central Tax formations during the last three years involved diverse sectors dealing in goods and services. These included iron and steel, textiles, plastics, paper products, plywood, cement and copper, as well as service sectors such as works contract services, manpower supply services and real estate services.
According to the State and Union Territory-wise details furnished in the annexures, Central Tax formations detected 9,190 ITC fraud cases involving ₹36,373.36 crore during 2023-24, with 182 persons arrested. During 2024-25, 15,283 cases involving ₹58,772.51 crore were detected, and 178 persons were arrested.
During 2025-26, 30,162 ITC fraud cases involving ₹74,781.56 crore were detected, and 358 persons were arrested.
Overall, Central Tax formations detected 54,635 ITC fraud cases involving approximately ₹1,69,927.43 crore during the three-year period from 2023-24 to 2025-26. A total of 718 persons were arrested in these cases.
| Financial year | ITC fraud cases detected | Amount detected | Persons arrested |
| 2023-24 | 9,190 | ₹36,373.36 crore | 182 |
| 2024-25 | 15,283 | ₹58,772.51 crore | 178 |
| 2025-26 | 30,162 | ₹74,781.56 crore | 358 |
| Total | 54,635 | ₹1,69,927.43 crore | 718 |
The Minister stated that the Government has introduced several measures to detect and prevent fraudulent Input Tax Credit claims and strengthen the GST return and registration systems.
The Invoice Management System facility was introduced on the GST portal in late 2024 to further streamline the auto-population of ITC information in returns. The system enables recipient taxpayers to accept, reject or keep invoices pending when such invoices are saved or filed by their suppliers.
Through the Invoice Management System, registered recipients can cross-verify and reconcile invoices reported by suppliers in Form GSTR-1. This has strengthened the ITC claim process and enabled taxpayers to manage incoming invoices more effectively.
The Government also conducted two nationwide special drives through coordinated action by the Central and State tax administrations. The first drive was conducted from May 16, 2023 to August 14, 2023, while the second was undertaken from August 16, 2024 to October 30, 2024. The drives focused on identifying fake GST registrations and preventing the fraudulent passing of Input Tax Credit.
Biometric-based Aadhaar authentication of GST registration applications has also been extended across the country. Under the amended Rule 8(4A) of the Central Goods and Services Tax Rules, applicants who do not opt for Aadhaar authentication are required to visit a GST Suvidha Kendra for photograph capture and verification of documents.
The Government has also made the filing of Form GSTR-1 mandatory before Form GSTR-3B for a tax period with effect from October 1, 2022. Sequential filing of GSTR-1 has also been mandated from the same date, making both GSTR-1 and GSTR-3B sequential on a tax-period basis.
This mechanism ensures that invoice details declared by sellers in GSTR-1 are used to auto-populate the Input Tax Credit available to recipients in Form GSTR-2B, thereby improving invoice-level verification and reducing the scope for fraudulent ITC claims.
The Minister further provided details of fake GST registrations obtained through the misuse of forged PAN and Aadhaar credentials. During 2023-24, 5,699 such fake registrations involving detection of ₹15,085 crore were identified. Sixty-seven persons were arrested and 14 masterminds were reported to be absconding.
During 2024-25, 3,977 fake registrations involving ₹13,109 crore were detected. Fifty persons were arrested and two masterminds were reported to be absconding. In 2025-26, 1,517 fake registrations involving ₹9,940 crore were detected, with 60 persons arrested and seven masterminds reported as absconding.
| Financial year | Fake registrations using forged PAN/Aadhaar | Amount detected | Persons arrested | Masterminds absconding |
| 2023-24 | 5,699 | ₹15,085 crore | 67 | 14 |
| 2024-25 | 3,977 | ₹13,109 crore | 50 | 2 |
| 2025-26 | 1,517 | ₹9,940 crore | 60 | 7 |
| Total | 11,193 | ₹38,134 crore | 177 | 23 |
The measures undertaken by the Government—including technology-based invoice reconciliation, biometric authentication, sequential return filing and coordinated enforcement drives—are aimed at curbing fake registrations, preventing fraudulent ITC claims and safeguarding GST revenue.
The Answer can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/07/RS-Evasion-of-GST-Input-Tax-Credit-28.07.2026.pdf
