GST evasion – India The News


According to Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs, about 30,000 GST cases related to FY 2021 and FY 2022 (in FY 2022-23) have been investigated at the central level. In this, we have detected tax evasion of about Rs 17,000 crore and so far 18 per cent i.e. Rs 3,060 crore has been recovered in such cases. The recovery figure may go up further as some cases are expected to be settled in the current financial year. For the financial year 2024, the authority has set a target of investigating 50,000 cases on the basis of risk. Johri clarified that this would be apart from the remaining cases of the previous financial year. GST Scrutiny or Departmental Scrutiny is carried out to verify the genuineness of sales declared, tax paid, refund claimed and input tax credit claimed, as ascertained from examination of tax returns and other records of the business. It alerts on tax evasion if there is any discrepancy in various documents. GST departmental checks have picked up since FY2023 following the grace period given to businesses to adopt it after its introduction in 2017. About launching the bi-monthly special drive, Johri said the objective is to find out the exact number of taxpayers. “We have shortlisted 30,000 cases for physical verification, of which 35 per cent or 10,000 cases so far were related to wrongly claiming input tax credit by allegedly issuing fake registrations,” he said. The department has so far detected bogus ITC claims of about Rs 7,000 crore through this drive. He said, ‘The purpose of taking this step in collaboration with the states is to identify those taxpayers who look suspicious due to their behavior and other activities. First of all, we have to prepare a list of taxpayers who may be at high risk. Thereafter, physical identification of these taxpayers would be done to ascertain that they are doing business and are present from somewhere. We have fixed some rules and regulations for their identification by the states. In case the existence of a unit is not detected, we are considering canceling its registration and even stopping the input tax credit. According to Johri, the departments are able to identify the users of ITC and the recipients who are the actual beneficiaries of the tax credit. He said that steps are being taken on the basis of this.

The steps that the Central Tax Department is taking to stop the evasion of GST are right in their place but the other aspect of the picture is that the officials should not play the game of heating their pockets by harassing traders and industrialists in the name of investigation. This should also be ensured by the department. Small and middle class businessmen and industrialists should be kept out of the purview of investigation. The third important thing is that the method of investigation should be such that no negative message goes towards the Central Government.

Traders and industry should also pay taxes according to the rules, keeping in mind the urgency of the time and keeping the country’s interest in front, keeping an eye on the black sheep so that they do not tarnish everyone’s reputation and image. Paying tax is beneficial for the development of the country, tax evasion will only create obstacles in development. You have to fulfill your duty by understanding this.

– Irwin Khanna (Chief Editor, Dainik Uttam Hindu)

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