India has discovered over 24,000 cases of fake GST invoices in the current financial year 2025-26, a significant increase compared to previous years. The government shared this information in the Rajya Sabha on Tuesday. Authorities are becoming concerned about the growing number of inactive pharmaceutical companies and other shell businesses being used to falsely claim tax refunds.
The officials had detected a rising number of “sleeping” companies being created or revived to generate fake invoices, along with several cases concerning dormant pharma units, Minister of State for Finance Pankaj Chaudhary stated.
The data of the Government exhibit that ITC fake cases have surged over the past four years, rising from 7,231 in FY23 to 15,283 in FY25. Over the same period, the value of suspected bogus invoicing bounced from Rs 24,140 crore to Rs 58,772 crore. The officials in FY26 have identified the fraud worth Rs 41,664 crore up to October.
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No estimation has been given by Chaudhary of the overall loss of revenue, but the stated fake ITC claims remained a major enforcement issue.
Pharma Shell Firms’ Cases Linked to Fraudulent Activities
Tax authorities reported three cases involving inactive pharmaceutical companies amounting to ₹31.71 crore in FY23, followed by two cases worth ₹5 crore in FY25. In FY26 so far, another two cases totalling ₹7.25 crore have been identified, while no such cases were recorded in FY24.
A Guide to Compliance
The Finance Ministry announced that it has enhanced verification measures by implementing mandatory e-invoicing for businesses with a turnover exceeding ₹5 crore. These measures include Aadhaar- and PAN-based authentication, biometric verification, geo-tagging of business premises, and the automatic suspension of GST registrations for those who fail to comply.
Fake ITC claims have been categorised as cognisable and non-bailable. The government has deployed an Invoice Management System for real-time invoice reconciliation and performed an enforcement drive all over the country in 2023 and 2024 to determine non-existent registrations.
Analysts anticipate increased technology-driven checks as authorities aim to reduce revenue losses from fraudulent invoicing, a significant source of GST-era tax evasion.
GST Theft by Sleeping Modules
