New Delhi: The Union government has stepped up its crackdown on fraudulent Goods and Services Tax (GST) registrations, uncovering large-scale misuse of forged identity documents to evade taxes. According to information placed before Parliament, 489 fake GST registrations linked to forged PAN and Aadhaar details were identified up to October 2025, leading to tax evasion exceeding ₹3,000 crore.
The disclosure was made by Minister of State for Finance Pankaj Chaudhary in a written reply to the Lok Sabha, highlighting the scale of abuse within the indirect tax system and the government’s intensified enforcement measures.
Official data shows that in financial year 2024–25, authorities detected 3,977 fraudulent GST registrations, resulting in ₹13,109 crore in tax evasion. In comparison, FY 2023–24 witnessed the identification of 5,699 such fake registrations, involving an estimated ₹15,085 crore loss to the exchequer.
Arrests and Investigations: 16 Held Between April and October
The enforcement drive has translated into arrests and prosecutions. Between April and October 2025, GST authorities arrested 16 individuals linked to fake registration networks. Earlier, 50 arrests were made in FY24, while 67 arrests have already been recorded in FY25.
Officials said these syndicates typically create shell entities using forged identity documents to issue bogus invoices, enabling the fraudulent passing of ineligible Input Tax Credit (ITC) across supply chains. Such practices not only erode government revenue but also distort fair competition in the market.
DGARM’s Role: Data Analytics at the Core of Detection
The Finance Ministry said that the Directorate General of Analytics and Risk Management (DGARM) has launched a focused exercise to detect anomalies in digital information submitted during GST registration.
DGARM is using advanced data analytics and risk parameters to identify taxpayers who exist solely on paper and are set up for fake invoicing and ITC fraud. Officials said risk-based profiling allows authorities to intercept suspicious registrations at an early stage, preventing revenue leakage before it escalates.
Nationwide Special Drives with State Coordination
To combat the menace, the government launched two nationwide special drives—the first from 16 May 2023 to 14 August 2023, and the second from 16 August 2024 to 30 October 2024. These campaigns were conducted jointly by Central and State tax authorities, ensuring coordinated enforcement across jurisdictions.
As part of these drives, tax officials carried out physical verification of business premises. A significant number of non-existent GST Identification Numbers (GSTINs) were detected during inspections and subsequently suspended or cancelled.
Biometric Aadhaar Authentication Made Mandatory
To further tighten safeguards, the government has rolled out biometric Aadhaar authentication nationwide for GST registrations. Every application is now assigned a system-generated risk rating, based on data analytics and predefined risk indicators.
These ratings are shared with CBIC field formations, enabling officers to conduct targeted verification and ensure that only genuine businesses are granted GST registration.
Mandatory Bank Account Details and Compliance Timelines
Providing bank account details at the time of GST registration has been made compulsory. The account must be in the name of the registered person and linked to their Permanent Account Number (PAN). For proprietorship firms, the account must also be linked with Aadhaar.
Registrants are required to furnish valid bank details within 30 days of registration or before filing their outward supplies statement, whichever is earlier. Failure to comply results in system-based suspension of registration. Additionally, registrations are automatically suspended if returns are not filed for six consecutive months.
Cross-Verification of Address Proofs
To prevent misuse of forged documents, address proofs submitted during registration are being cross-verified using publicly available databases, including land records, electricity distribution companies, municipal authorities and local bodies.
According to the government, these measures are designed to strengthen the credibility of the GST ecosystem, curb organised tax evasion and ensure that only legitimate businesses operate within the tax framework.
Officials maintain that the intensified enforcement, backed by technology and analytics, marks a decisive shift towards safeguarding revenue and restoring trust in the indirect tax system.
