AI Helps Detect ₹74,782 Crore GST Fraud
The Central government detected fake Input Tax Credit claims worth ₹74,782 crore across 30,162 cases during FY26, Parliament was informed. Authorities attributed the sharp increase to stronger artificial intelligence tools, data analytics and invoice-level verification rather than solely to a rise in GST fraud.
GST Fraud Detection Rises Sharply
The value of fraudulent ITC detected increased from ₹36,373 crore across 9,190 cases in FY24 to ₹58,773 crore across 15,283 cases in FY25.
In FY26, the amount rose further to nearly ₹74,782 crore, while the number of cases almost doubled from the previous financial year.
Input Tax Credit allows businesses to claim credit for GST already paid on purchases. Fraud occurs when businesses use fake invoices, shell companies or transactions without an actual supply of goods or services to claim credits or refunds.
AI Strengthens GST Fraud Crackdown
Tax authorities are using artificial intelligence and risk-scoring systems to identify abnormal credit flows, circular transactions and suspicious links between companies.
Invoice data is also being compared with GST returns, e-way bills and electronic invoices to determine whether claimed credits are supported by genuine transactions and the physical movement of goods.
The Invoice Management System allows businesses to accept, reject or hold invoices uploaded by suppliers, improving reconciliation before credits are claimed.
Fake GST Registrations Decline
Registrations obtained using forged PAN and Aadhaar details fell from 5,699 in FY24 to 1,517 in FY26.
The government has expanded biometric Aadhaar authentication, document verification and nationwide enforcement drives to prevent fraudulent entities from entering the GST system.
Officials said the next phase would focus on detecting suspicious invoice networks before fraudulent credits are claimed while avoiding unnecessary compliance burdens on genuine businesses.
