GST: Rs. 2,000cr tax evasion uncovered in two months
The GST investigation wing has detected tax evasion in excess of Rs. 2,000cr in two months. Additionally, analysis of data revealed that only 1% of the 1.11 crore registered businesses paid 80% of the taxes. Further, it's not just small businesses which slipped up, but even big corporate houses and multinationals who made mistakes while filing GST returns. Here are the details.
It's an alarming situation in terms of tax collection
"We have registration of more than 1 crore businesses. But..it's less than 1 lakh people paying 80% of the tax, one does not know what is happening in the system, it is an important thing to study," said CBEC member John Joseph.
Despite favorable provisions, tax evasion continues
Analysis of data also revealed that most of the tax evading businesses had annual turnovers of over Rs. 5 lakh. Under the GST composition scheme, for businesses whose turnovers don't exceed Rs. 1.5cr, traders and manufacturers are allowed to pay taxes at 1% less, while restaurateurs have to pay at 5%. Despite these provisions, tax evasion continues, and points towards greater compliance being required.
The modus operandi being followed by tax evading businesses
Investigation also revealed that the tax evaders, by and large, are following a modus operandi wherein fake invoices are being generated for goods which haven't been supplied at all. Based on these invoices, businesses are claiming tax input credit, or GST refunds for exports.
