NEW DELHI: Armed with data analysis and agency information, the government has launched a massive crackdown on GST evaders, taking action against 7,000 entities, including the arrest of 185, a campaign that contributed to improved tax collection. , finance secretary Ajay Bhushan Pandey he said on Sunday.
The government obtained a record GST collection of Rs 1.15 lakh crore in December 2020, helped by action against tax evaders coupled with the rebound in the economy.
In an interview with PTI, Pandey said that action against false billing fraud in the past month and a half has led to the arrest of 187, including five public accountants and a company secretary.
“Many of them, including some CEOs, are in jail for the past 40-50 days. Few large companies are also involved in carrying false invoices across multiple levels, evading GST and income tax. So they have also been booked, ”he said.
The action against those who try to misuse the system, he said, has been based on comparing information from various agencies such as Income Tax Department, customs unit, FIU and GST department and banks.
“We have taken action against 7,000 evaders of a tax base of 1.20 crore rupees. Therefore, our success rate is very high,” said Pandey, who is also the finance secretary.
He said that the Income Tax Department immediately follows up on all cases registered with a false GST invoice because the tax implication is greater.
“Due to the available data, it is very very difficult to escape because sooner or later they will be caught,” he said.
The secretary said that from April 1, electronic invoicing would be mandatory for all B2B transactions by companies with a turnover of more than 5 million rupees.
Electronic invoicing was made mandatory for B2B transactions of companies with turnover above Rs 500 million as of October 1, 2020, and for turnover above Rs 100 million as of January 1.
Pandey said the provision restricting the use of the input tax credit (ITC) is an anti-abuse provision and is aimed at shell companies.
“We have found many shell companies that issue billions of rupees and do not pay income tax and pay full liability through ITC. Therefore, to ensure that these companies cannot abuse the system, this Anti-abuse provision in particular has been introduced and this will affect less than 45,000 units in the entire Rs 1.2 crore tax base, “he said.
After uncovering a rampant fake billing scam to evade goods and services tax (GST), Central Board of Indirect Taxes and Customs (CBIC) amended the rules that oblige companies with a monthly turnover of more than Rs 50 lakhs to pay at least 1 percent of their GST liability in cash as of January 1.
The new rule restricts the use of the input tax credit (ITC) to discharge the GST liability to 99 percent.
GST collections rose to an all-time high of more than Rs 1.15 lakh crore in December, as economic activities recovered after the lifting of strict lockdown restrictions.
The GST, which is charged when a consumable item is sold or a service is provided, in December was 12 percent higher than such receipts in the same month of 2019.
Pandey said December has seen a collection of records since the implementation of GST, which can be attributed to two factors. “The trend suggests that the economy is recovering and we are seeing a faster rate of recovery.”
“In addition, measures such as electronic invoicing, the prepopulation of information about the supplier input tax credit, which deter those who try to claim an excessive ITC, are contributing to compliance. Through specific actions against tax evaders through analysis complete data, It is possible to identify the entity that issued the false invoice and also the final beneficiary, “he added.
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