Government Considers Tech-Based Shield to Prevent GST Input Tax Credit Fraud

• The government is considering using technology to prevent input tax credit (ITC) fraud in the Goods and Services Tax (GST) system.
• AI and data analytics can help detect ITC fraud, but recovery is slow and hindered by legal obstacles.
• The proposal suggests holding suspected ITC claims for physical verification before granting them.
• GST evasion worth over ₹4 lakh crore has been detected in four years, with less than 30% recovery.
• Fraudsters use bogus invoices from shell companies to claim ITC benefits without actual supplies.
• Only 27.7% of the detected evasion has been recovered, and 992 people have been arrested.
• The issue of ITC fraud was discussed in Parliament, with concerns raised about genuine taxpayers being denied credit due to fraudulent claims.
• The suggestion of implementing risk profiles to identify likely suspects before granting ITC was made.
• The Finance Minister assured that the GST Council has discussed these issues and taken steps to address them.

Source: a2ztaxcorp.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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