GST Evasion on the Rise: Govt Detects ₹7 Trillion During March 2020-25

The Indian government has found a staggering ₹7 trillion worth of GST evasion in 91,000 cases from March 2020-25. This information was shared by Minister of State for Finance, Pankaj Chaudhary, in a written reply to the Lok Sabha on Monday.

Rising Trend of GST Evasion Detection

The detection of GST evasion has seen a sharp increase over the years, rising from ₹49,300 crore in the fiscal year 2021 to ₹2.23 trillion in FY25. This upward trend is partly attributed to the expansion of data collection and stricter reporting norms implemented by the tax authorities.

Of the total amount detected, taxpayers have voluntarily deposited ₹1.29 trillion, reflecting a growing compliance trend among businesses. However, a significant portion of the evasion (around ₹1.78 trillion) relates to fake input tax credits, with only about 7% of these amounts voluntarily paid by taxpayers.

Advanced Measures to Curb GST Evasion

The government and the Goods and Services Tax Network (GSTN) have introduced multiple initiatives to strengthen compliance and curb evasion. These include mandatory e-invoicing, automated risk assessments, system-flagged mismatch alerts, and behaviour anomaly detection.

Such measures help identify suspicious tax returns and select cases for audits or scrutiny. Minister Chaudhary also highlighted the adoption of cutting-edge technologies such as facial recognition and analysis of e-way bill data to detect GST identification numbers prone to fraudulent activities early.

Challenges To Limiting GST Evasion

Despite these efforts, the minister cautioned that the direct impact of these compliance measures on overall revenue growth and reduction in tax evasion cannot be precisely measured. Various external factors, including global economic conditions, domestic consumption, and tax rates, also influence these outcomes.

Read more: IRDAI Slaps ₹5 Crore Fine on Policybazaar for Multiple Violations.

Conclusion

India’s indirect tax administration has made significant strides in detecting and addressing GST evasion through enhanced data-driven techniques and advanced technology. While voluntary deposits and audits show progress, ongoing efforts and reviews, such as the one on insurance GST, indicate a continuing focus on refining tax compliance and easing taxpayer burdens.

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