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In a significant development, the Directorate General of GST Intelligence (DGGI) has recently uncovered a staggering case of GST evasion amounting to ₹30,000 crore. This revelation comes as part of the intensified efforts by tax officers to detect and curb fraudulent activities under the Goods and Services Tax (GST) regime. The detection of such a substantial evasion highlights the ongoing challenges faced by the government in ensuring compliance and revenue protection.
According to official sources, the GST evasion detection has witnessed a substantial increase in the just-concluded fiscal year of 2022-23, with tax officers detecting evasion amounting to over ₹1.01 lakh crore. This amount marks a nearly double increase compared to the previous fiscal year. It is worth noting that in the last fiscal year, the DGGI had successfully recovered ₹21,000 crore. The government’s response to such evasion has been swift and proactive, with measures in place to enhance compliance and leverage data analytics and human intelligence to identify and combat fraudulent practices.
The modus operandi employed by these evaders includes various strategies such as undervaluing taxable goods and services, incorrect availment of exemption notifications, wrongful utilization of input tax credits, non-payment of taxes on taxable supplies, clandestine removal of goods and services, as well as fraudulent availment of input tax credits using invoices from fictitious firms. Such sophisticated tactics highlight the need for stringent monitoring and robust anti-evasion measures.
The detection of GST evasion cases has been on the rise over the years, indicating the need for continuous vigilance and strict enforcement of tax regulations. In the fiscal year 2022-23 alone, approximately 14,000 evasion cases were detected, surpassing the numbers from the previous two fiscal years. The total number of GST evasion cases detected in the last three fiscal years stood at 39,170.
To address this concerning issue, the government has been actively working towards detecting and preventing GST evasion. The Finance Ministry has been resolute in its efforts, aiming to protect the revenue base and ensure a fair and transparent tax system. In a reply to the Lok Sabha, it was revealed that GST evasion detected from July 2017 to February 2023 amounted to nearly ₹3.08 lakh crore, with a recovery of over ₹1.03 lakh crore. Furthermore, the authorities have taken decisive action by arresting 1,402 individuals involved in tax evasion in the past five-and-a-half years.
The government’s commitment to tackling GST evasion is crucial to maintaining a robust and sustainable revenue system. By deploying advanced data analytics, strengthening compliance mechanisms, and taking prompt enforcement actions, the authorities can further curb such fraudulent activities and ensure a level playing field for all businesses.
The fight against GST evasion remains an ongoing endeavor, necessitating continuous efforts from tax authorities and stakeholders to build a tax ecosystem characterized by integrity, transparency, and compliance. The unearthing of this massive GST evasion of ₹30,000 crore serves as a stark reminder of the challenges faced in safeguarding the nation’s revenue and upholding the principles of fair taxation.