New Delhi: The Directorate General of GST Intelligence (DGGI) has uncovered tax evasion amounting to Rs 1.2 trillion through the use of fake input tax credits (ITC) from 2020 to the present, with a focus on identifying and apprehending the masterminds behind these operations and dismantling the syndicates operating across the country, the finance ministry said in a release on Tuesday.

The GST intelligence department has identified approximately 59,000 fraudulent firms for verification and further investigation and has arrested 170 individuals involved in these fraudulent activities.

These details were disclosed during the national conference of GST enforcement chiefs, after which the ministry issued the release.

This development comes against the backdrop of a nationwide special initiative led by both the Central and State governments to identify and eliminate fake GST registrations.

The two-month all-India drive, which began on August 16, aims to detect suspicious or fraudulent GSTINs, carry out necessary verifications, and remove these fraudulent entities from the GST system to protect government revenue.

During a conference, Revenue Secretary Sanjay Malhotra emphasized the need to strike a balance between enforcement measures and the ease of doing business.

He urged Central and State GST teams to prioritize detecting fake registrations during this special drive and highlighted the importance of identifying the masterminds and beneficiaries behind fraudulent Input Tax Credit (ITC) claims to ensure that strict action is taken, serving as an effective deterrent.

Malhotra also noted that recent updates to GST returns, such as the introduction of GSTR-1A, will further support efforts to systematically combat GST evasion.

At the event, Sanjay Agarwal, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), advised enforcement units to focus on genuine cases of evasion rather than getting caught up in interpretative issues and common industry practices.

“Some of the best practices/guidelines issued to bring uniformity in action and ensuring ease of doing business were also deliberated upon,” the ministry release said.