New Delhi: Central Goods and Services Tax (CGST) officers detected 30,162 cases of fraudulent Input Tax Credit (ITC) involving approximately ₹74,782 crore during the financial year 2025–26, marking one of the largest crackdowns on GST-related tax fraud in recent years. Minister of State for Finance Pankaj Chaudhary disclosed the figures in a written reply to the Rajya Sabha on Tuesday. According to the government, Maharashtra and Gujarat accounted for the highest number of detected cases, while 358 people were arrested during the year.
The government stated that ITC fraud was uncovered across a wide range of manufacturing and service sectors. These included iron and steel, textiles, plastics, paper products, plywood, cement, copper, as well as service industries such as works contract services, manpower supply, real estate, and other business segments. Investigators found that fraudulent billing, shell companies, and fictitious transactions were allegedly used to claim Input Tax Credit illegally.
According to the official data, Maharashtra recorded 9,629 cases involving fraudulent ITC worth around ₹18,320 crore, while Gujarat accounted for 12,511 cases involving approximately ₹12,633 crore. These two states reported the highest number of cases and the largest financial impact. Across the country, investigations into these frauds resulted in the arrest of 358 individuals.
Data presented in Parliament also showed a steady rise in enforcement against ITC fraud over the past three financial years. During FY25, authorities detected 15,283 cases involving fraudulent ITC worth about ₹58,773 crore, leading to 178 arrests. In FY24, officials uncovered 9,190 cases involving nearly ₹36,373 crore, with 182 people arrested. The increasing number of detections reflects intensified surveillance and enforcement against fraudulent ITC networks.
In his reply, the Minister also shared details regarding fake GST registrations obtained using forged PAN and Aadhaar cards. During FY26, authorities identified 1,517 fake GST registrations created using forged identity documents. These entities were allegedly involved in ITC fraud amounting to nearly ₹9,940 crore. Investigations led to the arrest of 60 people, while seven accused are still absconding.
Government data further revealed that in FY25, officials detected 3,977 fake GST registrations linked to ITC fraud worth around ₹13,109 crore. In FY24, authorities identified 5,699 fake registrations associated with tax fraud amounting to approximately ₹15,085 crore. The figures indicate that fake GST registrations have remained a major tool for organised tax evasion, although intensified enforcement has led to greater detection and disruption of such networks.
Experts say shell companies created using forged PAN and Aadhaar documents are commonly used in organised GST fraud schemes. These entities allegedly issue fake invoices without conducting genuine business activities, enabling fraudulent claims of Input Tax Credit and causing significant losses to government revenue. The government has stated that the use of data analytics, digital surveillance, risk-based investigations, and inter-agency coordination will continue to strengthen efforts to identify and dismantle organised GST fraud networks across the country.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
