GST Evasion of ₹7.08 Lakh Crore Detected Over Last Five Financial Years

The Government of India has uncovered a staggering ₹7 trillion worth of Goods and Services Tax (GST) evasion in the past five years, according to Minister of State for Finance Pankaj Chaudhary. In a written reply to the Lok Sabha on Monday, Chaudhary revealed that the indirect tax administration detected 91,000 cases of evasion from April 2020 to March 2025.

The Scale of GST Evasion

• Total evasion detected: ₹7 trillion
• Cases identified: 91,000
• Voluntarily deposited by taxpayers: ₹1.29 trillion

The figures show a sharp upward trend — from over ₹49,300 crore in FY21 to ₹2.23 trillion in FY25. A massive ₹1.78 trillion of the evasion is linked to fake input tax credits (ITC), with only 7% of that amount voluntarily paid back.

Why the Increase?

The rise in detected evasion coincides with an expansion of data collection and reporting requirements by the GST administration. Officials attribute this to enhanced compliance monitoring tools and risk-based audits, which have improved the detection of fraudulent activities.

How GST Evasion is Being Detected

The Centre and the Goods and Services Tax Network (GSTN) have rolled out several technology-driven measures,

• E-invoicing for better transaction traceability.
• Automated risk assessment to flag suspicious taxpayers.
• Mismatch detection systems to identify inconsistencies in returns.
• Facial recognition systems for identifying fake GSTINs.
• E-way bill tracking to monitor goods movement.
• Behavioural analysis tools to spot anomalies in taxpayer patterns.

These methods aim to safeguard revenue, improve compliance, and nab tax evaders early.

Challenges in Measuring Impact

While these measures have led to higher detection rates, Chaudhary clarified that it is difficult to isolate their exact contribution to revenue growth or reduced evasion. Factors like global economic conditions, domestic consumption, and tax rate changes also play significant roles.