The method adopted by the fraudsters included undervaluing taxable goods and services in order to underpay tax, incorrectly claiming input tax credits, failing to pay tax on the supply of taxable goods and services (clandestine removal), and fraudulently claiming input tax credits based on invoices from fictitious companies.
According to Officials, GST Officers use data analytics to assess whether every link in the supply chain in a particular industry is paying the required amount of GST or if there is a missing link. The Directorate General of GST Intelligence (DGCI) has increased efforts to catch evasion at the beginning stage itself so that compliance improves after GST Evasion of more than Rs 1 lakh crore was found in the most recent fiscal year ended on 31st March.
The Directorate General of GST Intelligence (DGCI) has increased efforts to catch evasion at the beginning stage itself
PTI got the statement from the Company’s Official that, In order to determine whether the full value is paying appropriate GST or whether there is any missing information, we are employing end to end analytics for a sector and gap analysis of the taxes paid in the supply chain.
The data analysis compares the tax payment patterns of several industries to the former excise and service tax regime. The GST system is being further streamlined now that it has steadied. We want to make sure that every industry covered by the GST is paying its fair share of taxes, an official stated.
After doing the analysis, if the agency determines that altering the law or tariffs is necessary to reduce evasion while boosting compliance, it will be forwarded to the Council for Approval. Enforcement action may be taken, the source said, if a sub part of any sector in the value chain is found to be evading taxes.
The data analysis compares the tax payment patterns of several industries to the former excise and service tax regime
Although data analytics takes time, it is necessary to detect GST avoidance at the production stage itself. While guaranteeing that compliance improves, it will aid increase revenue collection, the officials continued. Rajat Mohan, Senior Partner at AMRG & Associates, stated that the DGCI has been given a variety of technological tools to help it identify high risk industries that are not fully capturing the genuine value addition along the whole supply chain, which results in tax theft.
In the fiscal year 2022 to 2023, tax officials found more than Rs 1.01 lakh core in GST Evasion, near doubling year over year. The DGCI officers were able to retrieve Rs. 21,000 crores. As of 2022 to 2023, there were around 14000 cases of Goods And Services Tax Evasion, up from 12,574 cases in 2021-2022 and 12, 596 cases in 2020-2021.
As of 2022 to 2023, there were around 14000 cases of Goods And Services Tax Evasion, up from 12,574 cases in 2021-2022 and 12, 596 cases in 2020-2021.
The fraudsters’ methods included undervaluing taxable goods and services in order to underpay tax, utilizing the exemption notifications incorrectly, failing to pay tax on the supply of taxable goods and services, and utilizing the input tax credit fraudulently by using invoices from fictitious companies.
The entire amount of GST fraud discovered between July 2017 and February 2023, according to the Finance Ministry’s response to the Lok Sabha last month, was close to Rs. 3.08 lakh crore, of which over Rs. 1.03 lakh crore was recovered. In the past five and a half years up through February 2023, the GST Officials had detained 1,402 people for tax evasion.
