**Executive Summary:**
The Ministry of Finance addressed concerns regarding fraudulent GST registrations obtained using forged or stolen credentials. The government has detected such cases, leading to tax evasion through fake invoicing and ineligible Input Tax Credit claims. Measures are being implemented to strengthen verification processes, and arrests/prosecutions have occurred in connection with these activities.
**Key Points / Main Content:**
* **Fraudulent GST Registrations:**
* Cases of fraudulent GST registrations using forged/stolen PAN and Aadhaar credentials have been detected.
* These registrations result in fake/bogus invoicing and the passing of ineligible Input Tax Credit (ITC), leading to GST evasion.
* **Statistical Data (Central Tax Formations):**
* **2023-24:**
* 2800 cases of fraudulent GST registrations
* 5699 fake firms identified
* ₹15085 crore detection
* **2024-25:**
* 1654 cases of fraudulent GST registrations
* 3977 fake firms identified
* ₹13109 crore detection
* **Measures to Prevent Misuse:**
* Biometric-based Aadhaar authentication for GST registration applications.
* Risk-based rating system for registration applications, enabling CBIC to conduct proper verification.
* Requirement for geotagging the place of business for new registrations.
* Mandatory furnishing of bank account details in the name of the registered person, linked with PAN/Aadhaar.
* System-based suspension of registration for failure to furnish valid bank account details or non-filing of returns for six months.
* Cross-verification of address proof documents from publicly available sources.
* DGARM identifies anomalies in digital information from proprietorship firms and risky taxpayers involved in fake invoicing.
* Special drives against fake ITC and registrations were launched in FY 2023-24 and 2024-25.
* **Arrests and Prosecutions:**
* **2023-24:** 67 persons arrested, 53 prosecutions launched.
* **2024-25:** 50 persons arrested, 33 prosecutions launched.
**Impact Analysis:**
* **GST Authorities (CBIC, DGARM):**
* *Impact:* Enhanced responsibilities for verification, risk assessment, and enforcement. Need to implement and monitor new verification protocols.
* *Action Required:* Implement biometric authentication, risk-based ratings, and geotagging. Conduct verifications and launch special drives.
* **New GST Registrants:**
* *Impact:* More stringent verification processes during registration, including biometric authentication and geotagging of business places.
* *Action Required:* Comply with new verification requirements, including Aadhaar authentication, accurate documentation, and providing valid bank account details.
* **Existing GST Registered Persons:**
* *Impact:* Potential suspension of registration for non-compliance with bank account details or return filing. Increased scrutiny and potential audits.
* *Action Required:* Ensure timely filing of returns, furnish valid bank account details, and cooperate with verification processes.
* **Banks:**
* *Impact:* Bank account details are critical to validating GST registrations
* *Action Required:* Ensure that bank account details are accurate.
Key Entities Referenced
Goods and Services Tax: A value-added tax levied on most goods and services sold for domestic consumption. Abbreviated as GST.
PAN: Permanent Account Number, a ten-character alphanumeric identifier, issued by the Income Tax Department of India.
Aadhaar: A 12-digit individual identification number issued by the Unique Identification Authority of India.
Ministry of Finance: A ministry in the Government of India responsible for the financial matters of the country.
Shri Pankaj Chaudhary: Minister of State in the Ministry of Finance.
Central Board of Indirect Taxes and Customs: Referred to as CBIC, responsible for administering Customs, GST, Central Excise, Service Tax & Narcotics in India.
Directorate General of Analytics and Risk Management: Referred to as DGARM, identifies anomalies in digital information for GST registration.
Input Tax Credit: Referred to as ITC, is a mechanism to avoid cascading effect of tax.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UN-STARRED QUESTION NO. 3952
TO BE ANSWERED ON MONDAY, AUGUST 18, 2025/27 SRAVANA 1947 (SAKA)
“FRAUDULENT GST REGISTRATION”
3952. Shri Sasikanth Senthil:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government is aware of fraudulent Goods and Services Tax (GST) registrations
obtained using forged or stolen PAN and Aadhaar credentials and if so, the nature and scale of such
cases reported during the last two years;
(b) the number of fake GST registrations identified and the total tax evasion linked to these cases;
(c) the measures being implemented by the Government to strengthen verification protocols and
prevent the misuse of individual credentials for GST registration and fake billing activities; and
(d) whether any arrests, prosecutions or convictions have taken place in connection with such
fraudulent activities during the last two years and if so, the details thereof?
ANSWER
MINISTER OF STATE IN MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): Yes. Cases have been detected where fraudulent Goods and Services Tax (GST) registrations
have been obtained using forged or stolen PAN and Aadhaar credentials, resulting into fake/bogus
invoicing and passing of ineligible Input Tax Credit, thereby evading GST. The details are as
tabulated below.
(b): The details of the cases booked by Central Tax formations are as under:
Period No. of cases of No. of fake Detection
Fraudulent GST firms identified (₹ in crores)
registrations obtained by in such cases
using stolen or forged
PAN/AADHAAR
details of other people
2023-24 2800 5699 15085
2024-25 1654 3977 13109
(c): Following measures have been implemented by the Government to prevent misuse of individual
credentials for GST registration and fake billing activities:
(i) Biometric-based Aadhaar authentication, driven by data analytics and risk-based parameters, has
been implemented for processing GST registration applications throughout the country;(ii) All registration applications are assigned a risk rating by the system based on data analytics and
risk parameters. These ratings are made available to the field formations of CBIC to enable them to
conduct proper verification and further processing of applications;
(iii) The requirement for geo-tagging the place of business of the applicant for new registrations has
been provided on the portal. This helps in risk assessment and in identifying suspicious
applicants/taxpayers;
(iv) The furnishing of bank account details as part of the registration process is mandatory. The
account must be in the name of the registered person, obtained on the Permanent Account Number
(PAN) of the registered person and in the case of a proprietorship firm, linked with Aadhaar. Further,
bank account details must be furnished within 30 days of the grant of registration or before filing
the statement of outward supplies, whichever is earlier;
(v) Provision has been made for system-based suspension of the registration of persons who fail to
furnish valid bank account details within the prescribed time;
(vi) System-based suspension of registrations is carried out on the portal in cases where returns have
not been filed for six months;
(vii) To ensure that fake registrations are not granted, the authenticity of the documents furnished
as proof of address is cross-verified from publicly available sources, such as the websites of the
concerned authorities, land registries, electricity distribution companies, municipalities, and local
bodies;
(viii) Directorate General of Analytics and Risk Management (DGARM) has initiated an exercise
to identify anomalies in digital information provided by the proprietorship firms at the time of GST
registration. GST registrations are identified, shortlisted wherein misuse of individual credentials
like PAN is suspected. These suspect GSTINs are shared with field formations for appropriate
verification. In addition, DGARM also focuses on the identification of the risky taxpayers solely
created for fake/bogus invoicing and passing on ineligible ITC in the supply chain;
(ix) To weed out fake/bogus registrations, two special drives against fake Input Tax Credit and fake
registrations were launched during the Financial Year 2023-24 and 2024-25 in coordination between
the State and Central GST administrations.
(d): The details of arrests and prosecution are as under:
Period No. of persons Prosecutions
arrested launched
2023-24 67 53
2024-25 50 33
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