Central GST Uncovers ₹1.95 Lakh Crore Tax Evasion in Fiscal Year

Tax Evasion Under GST Nears ₹2 Lakh Crore in FY25; ITC Fraud in Spotlight

The Central GST authorities have detected nearly ₹2 lakh crore worth of tax evasion in the first ten months of FY 2024–25, signalling continued challenges in curbing fraud and misuse within India’s indirect tax system.

According to data tabled in the Lok Sabha, enforcement teams unearthed evasion amounting to ₹1.95 lakh crore across 25,397 cases between April 2024 and January 2025. While investigations are still ongoing in several instances, voluntary payments totalling ₹21,520 crore were made by those under scrutiny.

Fraudulent ITC Claims Continue to Dominate Of particular concern is the scale of fake Input Tax Credit (ITC) claims. Out of the total cases, 13,018 were linked to ITC fraud, representing a cumulative misuse of ₹46,472 crore in ineligible credits. Voluntary deposits in these cases stood at ₹2,211 crore, underscoring both the intensity of enforcement efforts and the scale of financial leakage.

Multi-Year Trends Suggest Persistent Challenges The latest figures are consistent with a broader trend observed over the past five financial years. From FY 2020–21 to FY 2024–25 (up to January), GST authorities have identified over 86,700 evasion cases, involving a staggering ₹6.79 lakh crore in suspected revenue loss:

FY 2023–24: 20,582 cases, ₹2.3 lakh crore
FY 2022–23: ₹1.32 lakh crore
FY 2021–22: ₹73,238 crore
FY 2020–21: ₹49,384 crore

Enforcement Tools Evolve with Technology In response to increasingly sophisticated fraud tactics, the tax department has significantly scaled up its technological and investigative capabilities. Several focused interventions are now in place:

Intelligence sharing across agencies has been streamlined to target high-risk entities.
Biometric authentication and physical verification of new GST registrations have been introduced to screen out fictitious firms.
E-way bill analytics are being used to flag anomalies in goods movement data.
Risk-based audit selection allows authorities to concentrate on cases where evasion risk is higher.

Project Anveshan: Advanced Surveillance in Action A key pillar of the current enforcement push is Project Anveshan, an AI-enabled initiative that integrates analytics, geolocation, facial recognition, and real-time transaction monitoring. The project is designed to quickly detect and respond to inconsistencies in taxpayer profiles and activities, particularly around fake invoicing and layered transactions.

Fake Firms, Real Losses In the ongoing financial year, authorities have identified approximately 25,009 non-genuine entities accused of facilitating fraudulent ITC claims totalling ₹61,545 crore. Many of these entities were flagged through digital profiling and Aadhaar-linked verifications.

In such cases, the government has adopted a firm approach: suspending suspect GSTINs, blocking ITC utilisation, and initiating arrests and prosecutions where warranted.

Recoveries and Deterrence Alongside detection, recovery efforts have yielded significant sums, with thousands of crores reclaimed and hundreds of arrests carried out. The focus remains on disrupting fraudulent networks while reinforcing compliance among legitimate taxpayers.

Looking Ahead The latest data reflects both the scale of the GST enforcement challenge and the increasingly proactive measures being deployed to address it. As fraud schemes become more layered, the GSTN and Central authorities appear committed to keeping pace through data intelligence, inter-agency coordination, and field-level investigations—ensuring that the indirect tax system remains resilient and credible.