India’s Central Goods and Services Tax (CGST) field officers have detected tax evasion of ₹7.08 trillion across 91,370 cases between FY 2020–21 and FY 2024–25. A significant portion—nearly ₹1.79 trillion—was linked to fraudulent Input Tax Credit (ITC) claims, as disclosed in Parliament.
According to data presented by Minister of State for Finance Pankaj Chaudhary, GST evasion peaked in the last two fiscal years. In FY 2024–25 alone, field officers uncovered evasion worth ₹2.23 trillion across 30,056 cases, with over half—15,283 cases—tied to ITC fraud involving ₹58,772 crore.
Year-by-Year Breakdown: A Growing Pattern
The evasion figures reflect a concerning pattern of large-scale manipulation and fake invoicing:
- FY 2023–24: ₹2.30 trillion detected, including ₹36,374 crore in ITC fraud
- FY 2022–23: ₹1.32 trillion detected, with ₹24,140 crore in fake ITC claims
- FY 2021–22: ₹73,238 crore, of which ₹28,022 crore was ITC-related
- FY 2020–21: ₹49,384 crore, including ₹31,233 crore in ITC fraud
These cases point to systemic exploitation of the ITC mechanism, where businesses falsely claim credits on taxes never paid.
Tax Recovery and Government Response
Despite the high detection numbers, tax authorities have managed to recover over ₹1.29 trillion through voluntary deposits during the five-year period. The government has reiterated its commitment to curbing evasion through a mix of technology, analytics, and targeted audits.
Chaudhary noted that digital tools such as e-invoicing, GSTN analytics, and AI-based red-flagging systems are being used to catch mismatches, identify high-risk taxpayers, and audit returns more effectively. He stated that these steps are already helping “safeguard revenue and nab evaders.”
Net Collection Still Robust Despite Leakages
Interestingly, even with such massive evasion, actual GST collection has remained relatively stable. In FY 2024–25, net CGST collection stood at ₹10.26 trillion, achieving 96.7% of the Revised Estimates. The previous year saw 100.1% of the RE met, with ₹9.57 trillion collected.
The CGST collection figure includes revenues from Central GST, Integrated GST, and compensation cess. Government officials believe that strengthening compliance mechanisms can further boost revenue and plug critical gaps.