The central government has uncovered hundreds of fake GST registrations created using forged PAN and Aadhaar details, exposing large-scale tax fraud. Officials told Parliament that such fraudulent registrations have caused tax evasion worth more than ₹3,000 crore up to October this year.
The disclosure highlights the growing misuse of identity documents to create shell firms under the Goods and Services Tax (GST) system. Authorities say tighter checks and technology-led monitoring are now helping detect these frauds faster.
How Many Fake GST Registrations Were Detected?
According to data shared in the Lok Sabha, 489 fake GST registrations linked to forged PAN and Aadhaar were identified till October in the current financial year. These cases alone led to tax evasion exceeding ₹3,000 crore.
The scale of the problem is much larger when looking at previous years. In FY 2024–25, officials detected 3,977 fraudulent GST registrations, resulting in tax evasion of ₹13,109 crore. In FY 2023–24, another 5,699 fake registrations were found, with tax evasion pegged at ₹15,085 crore.
How Many People Have Been Arrested So Far?
GST authorities have also taken enforcement action. Between April and October this year, 16 people were arrested for their role in GST fraud. In comparison, 50 arrests were made in FY 2024, while 67 individuals were arrested in FY 2025. Officials say investigations are ongoing, and more arrests could follow as fresh cases emerge.
What Action is the Government Taking?
The government has stepped up efforts to stop fake GST registrations at the entry stage. The Directorate General of Analytics and Risk Management (DGARM) is using data analytics to detect suspicious patterns in GST applications.
DGARM is also focusing on identifying entities created only for fake invoicing and passing on ineligible Input Tax Credit (ITC) across supply chains.
Two nationwide special drives were launched to crack down on bogus registrations. These were conducted between 16 May 2023 and 14 August 2023, and later from 16 August 2024 to 30 October 2024.
“The drive against non-existent/ fake registrations involved physical verification of the business premises of the taxpayers by duly constituted teams of tax officials. During this special drive, non-existent GSTINs were identified and suspended/cancelled,” Chaudhary said.
What Must GST Applicants Know?
The GST registration process has become stricter across India. Biometric Aadhaar authentication is now mandatory and is backed by risk-based data analytics. Every GST application receives a system-generated risk rating. Officials use this rating to decide whether deeper verification is needed before approval.
Providing bank account details is also compulsory. The account must be in the registered person’s name and linked to their PAN. For proprietorship firms, it must also be connected to Aadhaar. Applicants must submit bank details within 30 days of registration or before filing outward supply statements. Failure to do so can lead to automatic suspension.
How Does the System Prevent Fake Registrations?
Authorities now cross-check address proofs using public databases. These include land records, electricity boards, municipal records, and other government portals. GST registrations are also system-suspended if returns are not filed for six months. Officials say these measures aim to block shell firms before they can be used for tax fraud.
Why This Crackdown Matters?
Fake GST registrations hurt government revenue and distort legitimate business activity. Officials say stronger checks, analytics, and physical verification are key to protecting the tax system and ensuring fairness.
The government has signalled that enforcement will remain strict as it continues to track and dismantle GST fraud networks across the country.
