Finance

Published: May 16, 2023
Updated: May 16, 2023

"Crackdown on GST Fraud: Special Drive Launched to Safeguard Government Revenue"

In a concerted effort to tackle GST fraud and safeguard government revenue, the Central and State tax administrations in India have launched a two-month special drive. This initiative aims to detect suspicious/fake Goods and Services Tax Identification Numbers (GSTINs) and take necessary action against fraudulent billers. While the drive may raise concerns among GST assesses, experts emphasize that not every taxpayer needs to panic. Let's delve into the details of this significant move.

The All-India Drive against GST Fraudsters:

Starting from May 16, 2023, until July 15, 2023, the Central Board of Indirect Taxes & Customs (CBIC) has instructed all tax administrations to launch a special drive. The primary objective is to identify and weed out fake billers from the GST ecosystem and protect government revenue. This nationwide effort will focus on detecting suspicious/fake GSTINs and conducting verification to take remedial action.

Rising Concerns of GST Evasion:

Despite a significant increase in the number of registered taxpayers, GST evasion has become a growing concern. In the previous fiscal year, tax officers detected evasion cases amounting to over ₹1.01 lakh crore, nearly double the previous year's figure. The Directorate General of GST Intelligence (DGGI) played a crucial role in recovering ₹21,000 crore out of the detected evasion. These numbers underscore the urgency to address GST evasion effectively.

State Wise Cases of GST Evasion:

The cases of GST evasion vary across different states and union territories. Maharashtra topped the list with evasion detection amounting to ₹60,059 crore, followed by Karnataka, Gujarat, Delhi, and Haryana. The numbers highlight the widespread nature of the issue and the need for stringent measures to combat GST fraud effectively.

Actions to Be Taken in the Special Drive:

The special drive will leverage detailed data analytics and risk parameters to identify fraudulent GSTINs. Once suspicious GSTINs are identified, the GST Network (GSTN) will share the information with the respective State and Central Tax administrations for verification and necessary action. If a taxpayer is found to be non-existent or fictitious after thorough verification, their registration will be suspended or canceled. Additionally, efforts will be made to block input tax credit in the Electronic Credit Ledger and identify recipients of credit from non-existing taxpayers.

Uncovering the Masterminds and Ensuring Recovery:

The drive also aims to uncover the masterminds and beneficiaries behind fake GSTINs. Further action will be taken against them, including recovery of government dues and possible provisional attachment of their properties or bank accounts. A National Coordination Committee, led by the Member [GST] of CBIC, will oversee and monitor the progress of this special drive, ensuring its effectiveness.

The launch of the special drive against GST fraud reflects the government's commitment to curbing evasion and protecting government revenue. While the initiative may instill some concerns among taxpayers, it is essential to remember that it primarily targets fraudulent elements within the GST ecosystem. By identifying and taking action against fake billers, the drive aims to ensure a fair and transparent taxation system. Taxpayers should comply with GST regulations diligently, and legitimate businesses need not panic as they will continue to contribute to India's economic growth and development.