₹2,000 cr GST evasion unearthed in 2 months
NEW DELHI: The GST investigation wing has detected tax evasion of over Rs 2,000 crore in two months, and data analysis reveals that only 1 per cent of over 1.11 crore registered businesses pay 80 per cent of the taxes, a senior official said on Wednesday.
CBIC member John Joseph said alike small businesses who are making mistakes while filing GST returns, multinationals and big corporates too have slip-ups.
"If you look at the way tax revenues are paid, it gives an alarming picture. We have registration of more than 1 crore businesses.
"But if you look at where the tax is coming from, it is less than 1 lakh people paying 80 per cent of the tax, one does not know what is happening in the system, it is an important thing to study," Joseph said at an Assocham event here.
Joseph, who is also the Director General of Goods and Services Tax Intelligence (DG GSTI), said the analysis of composition dealers data shows that most of them have an annual turnover of Rs 5 lakh. "This shows that a lot of compliance is required."
Under the composition scheme, traders and manufacturers are allowed to pay taxes at a reduced rate of 1 per cent, while restaurant owners have to pay at 5 per cent rate. The scheme is open for manufacturers, restaurateurs and traders whose turnover does not exceed Rs 1.5 crore.
Joseph said investigation has revealed that a modus operandi is being followed whereby fake invoices are being generated for goods which have not been supplied at all.
Based on these invoices, some entities are claiming input tax credit. Besides, without actually exporting goods, some entities are claiming GST refunds based on fake invoices.
"Government revenue is being taken away. We in a short period of 1-2 months have detected over Rs 2,000 crore evasion which could be only the tip of the ice berg," Joseph said, adding the GST Intelligence wing will step up efforts in the days ahead. NEW DELHI: GST Network has decided to go in for third-party audit of its software developed by Infosys to ensure that all changes in law are adequately captured and its performance is not lagging on any count, a senior official said.
GSTN operates the IT backbone for collection of Goods and Services Tax (GST) data of over 1.11 crore registered business entities. A thirdparty audit will ensure that data filed with GSTN is adequately secured and there are no glitches.
GST Network Chief Executive Prakash Kumar said third-party audit is a standard practice which is followed by banking and financial institutions.
"Whenever the law is changed or any circular is issued, we have to change the software. We need to have a third party to audit whatever software changes have been made by Infosys. So this is third-party expert audit," Kumar said in an interview.