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Central GST officers detected input tax credit (ITC) fraud worth INR 74,782 crore during FY26 across more than 30,000 cases, with Maharashtra and Gujarat reporting the highest number of violations. The fraud was found across several industries, including real estate, construction-related services, iron and steel, textiles, plastics and manpower supply. The government also identified over 1,500 fake GST registrations created using forged PAN and Aadhaar details. The data, shared in the Rajya Sabha, highlights continued action by tax authorities against fake invoicing and fraudulent ITC claims.
Central GST officers detected input tax credit (ITC) fraud worth around INR 74,782 crore during the financial year 2025-26, according to information shared by the Ministry of Finance in the Rajya Sabha earlier this week. The fraud was identified across 30,162 cases, with Maharashtra and Gujarat accounting for the highest number of detections.
Minister of State for Finance Pankaj Chaudhary, in a written reply in the Rajya Sabha, said the cases were spread across a wide range of sectors dealing in both goods and services. These included iron and steel, textiles, plastics, paper products, plywood, cement, copper, along with service sectors such as works contract services, manpower supply services and real estate services.
Among all states, Maharashtra reported 9,629 cases involving ITC fraud worth INR 18,320 crore, the highest fraud value recorded during the year. Gujarat registered 12,511 cases, involving fraud amounting to INR 12,633 crore, making it the state with the highest number of detected cases. A total of 358 people were arrested in connection with these frauds during FY26.
The figures indicate a sharp rise in enforcement activity compared with previous years. During FY25, central tax authorities detected 15,283 cases involving ITC fraud worth INR 58,773 crore, leading to the arrest of 178 individuals. In FY24, authorities uncovered 9,190 cases involving fraud worth INR 36,373 crore, with 182 arrests made.
The minister also provided details on fraudulent GST registrations obtained using forged Permanent Account Number (PAN) and Aadhaar documents. Such fake registrations are often used to generate bogus invoices and claim or pass on ineligible input tax credit, resulting in revenue losses for the government.
During FY26, authorities detected 1,517 fake GST registrations created using forged PAN and Aadhaar details. These entities were linked to ITC fraud amounting to INR 9,940 crore. Enforcement agencies arrested 60 people in connection with these cases, while seven accused were reported to be absconding.
The number of fake registrations identified has reduced over the past three financial years. In FY25, officials detected 3,977 fake GST registrations involving ITC fraud worth INR 13,109 crore. In FY24, 5,699 such registrations were found, with fraud amounting to INR 15,085 crore.
The Central Board of Indirect Taxes and Customs (CBIC) has been intensifying action against fake invoicing and fraudulent ITC claims through data analytics, inter-agency coordination and targeted verification drives. The department has also introduced stricter registration checks and risk-based monitoring to curb the misuse of GST registrations and strengthen compliance under the indirect tax regime.
Source PTI
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