Government detects Rs 20,000 crore GST evasion evasion in Apr-Feb

The government will soon take more measures to increase compliance, and act against evaders in such a way that genuine businesses do not suffer.

GST evasion worth Rs 20,000 crore has been detected so far  this fiscal by the Government, media reported. The Government will take more steps to check frauds and increase compliance, reports quoted a senior tax officer, Central Board of Indirect Taxes and Customs Member (Investigation) John Joseph, as saying Wednesday. 

Between April-February 2018-19, GST evasion worth Rs 20,000 crore has been detected of which Rs 10,000 crore was recovered, Joseph said. On Tuesday, tax officials detected fake invoice worth Rs 1,500 crore which was used to claim illegal GST credit of Rs 75 crore, Joseph said.

“We have already recovered Rs 25 crore and the rest is on the way,” media reports quoted Joseph. 

He added that only 5-10 per cent of the businesses are “black sheep” and bring bad name to the industry. 

Joseph said that the government will now take more measures to increase compliance, and act against evaders in such a way  so that genuine businesses do not suffer. 

The government has been dynamic in rationalising tax rates since GST rollout on July 1, 2017, while increasing compliance for 1.2 crore registered businesses, he said.

He added that a meeting of the representatives of the real estate sector with the department would be held soon to understand transition issues faced by the sector post reduction in GST rates.

Earlier this week, the GST Council, chaired by Finance Minister Arun Jaitley and comprising finance ministers of states  cut tax rates on under-construction apartments and affordable housing to five per cent and one per cent, respectively.

However, builders will not be able to claim credit for the taxes paid on inputs, like steel, cement. The earlier GST rate on under-construction apartments and affordable housing was 12 per cent and eight per cent with input tax credit (ITC), respectively. 

As regards the demand for ITC relief to the builders of the under-construction flats that are built but not yet sold to buyers, Joseph said it will have to be raised with the urban development ministry.

“You need to talk to them (urban development ministry). As revenue department we cannot give you any benefit of subsidy to that extent,” media reports quoted Joseph who was at an Assocham event here. 

“In future, as GST moves forward, the rates need to consolidate. Across the world it is one rate, but it may not be possible for us to implement it here… because we have the poorest of the poor and the richest of the rich in the country. “What is good for the richest, cannot be the best for the poor… But five rates converging into two or three, depending on what the Council decides. This is the way forward,” reports in the media quoted Joseph. 

Currently, GST has 4-tier slab of 5, 12, 18 and 28 per cent, while essential items are zero rated.

Source: Media reports

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