PIL In Supreme Court Seeks Action Against Fake GST Registrations

A public interest litigation has been filed in the Supreme Court by lawyer Rudra Vikram Singh against fraudulent GST registrations.

The petition highlights widespread misuse of PAN and Aadhaar data, enabling cybercriminals to create fake firms for tax evasion.

It alleges that auto-approval in GST registration allows fake companies to obtain numbers within hours without document verification.

Once approved, these entities reportedly engage in fraudulent billing, input tax credit scams, and revenue loss worth thousands of crores.

The PIL demands halting auto-approvals, stronger PAN and Aadhaar checks, and a centralised monitoring system or CBI-led investigation. It further seeks protection and compensation for individuals whose identity details have been misused in such fraudulent company registrations.

According to reports, authorities cancelled over 1.25 lakh fake GSTINs in two years, exposing massive nationwide tax fraud operations.

Additionally, in one case, Singh’s PAN was misused in Karnataka, registering RVS Enterprises, which issued fake invoices worth ₹37.85 lakh.

The petition cites an RTI revealing auto-approval enabled such fake registrations without Aadhaar authentication or e-certification of documents.

Past investigations also revealed shell company scams, including DGCI’s 2018 probe uncovering ₹1,200 crore fraud through twenty fraudulent entities. Government records show tax fraud worth ₹11,377 crore detected by 2020, followed by ₹20,124 crore uncovered in just three months.

By December 2023, authorities identified 21,791 fake registrations nationwide, accounting for ₹24,000 crore revenue loss, raising alarming concerns.

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