Enhanced Technology-Based Risk Profiling to Combat Input Tax Credit Frauds
The government is taking proactive measures to address the issue of GST evasion and input tax credit frauds, considering the significant amount of evasion detected in the past four years. It has been revealed that over 4 lakh crore rupees of GST evasion has been detected during this period, with less than 30% of the evaded amount recovered.
To mitigate such fraudulent activities, the government is exploring the implementation of more robust technology-based advanced risk profiling methods. The objective is to identify potential cases of input tax credit frauds at an early stage and prevent any false claims from being processed.
Key points to consider:
Increasing the use of Technology: The government is focusing on leveraging technology to strengthen the existing risk profiling mechanisms. Advanced algorithms and data analysis techniques will be employed to identify suspicious claims and transactions.
Pre-emptive Measures: The intention behind implementing intensified risk profiling is to preemptively detect and block fraudulent claims before they are processed. This step aims to reduce instances of fraud and potential revenue loss.
Scrutiny and Verification Process: Claims that are flagged as suspicious under the risk profiling system will undergo a thorough scrutiny process. Only after rigorous investigation and verification, will these claims be allowed to pass through for further processing.
Recovery of Evasion: The low recovery rate (less than 30%) of the detected GST evasion amount is concerning. By implementing robust risk profiling measures, the government aims to enhance the detection of evasion and increase the recovery rate.
The introduction of technology-driven risk profiling measures is expected to streamline the GST system, reduce fraud, and prevent revenue leakage. These efforts emphasize the government’s commitment to ensuring transparency and compliance in the taxation system.
