The government has launched a crackdown on goods and services tax (GST) evaders ahead of the end of the fiscal year, signalling it will pursue tax dodgers.
The Directorate General of GST Intelligence, the apex intelligence unit under the Central Board of Excise and Customs, has in an all-India operation that began on Tuesday detected tax evasion to the tune of Rs 440 crore, a person privy to the development said on condition of anonymity.
The nature of evasion includes non-payment of tax, wrongful claim of tax rebates and failure to remit to the government taxes collected from customers.
Most of the firms under investigation are medium-sized.
The sectors where tax evasion has been detected include iron and steel, port services and organized retailers, the person said, adding that this is the first time such an operation has been carried out after the new indirect tax regime was implemented on July 1.
Authorities have so far been focusing on helping tax payers get used to the new system.
The investigation included searches at 125 premises of 110 assessees, which resulted in an immediate payment of Rs 49 crore. Tax evasion of over Rs 100 crore was detected in the city of Chennai alone.
“This is just the beginning,” said the official cited above, adding that authorities will not tolerate tax evasion.
Cases of evasion include collusion between buyers and sellers to undervalue transactions. With the evaders using innovative ways, the government has asked the GST Network, the company that processes GST returns, to hire fraud analytics providers to comb through tax data to detect evasion patterns.
Union and state tax authorities are worried about tax evasion as GST revenue fell marginally for the second straight month in March to Rs 85,174 crore, even as return filing compliance improved.
The number of tax payers who filed their returns under GST rose to an all-time high of 5.95 million in March. This is 69% of tax payers who are required to file monthly returns.