GST has been started from July 2017. Since then, the revenue authorities have detected rampant tax evasion via black marketing and under-valuing of imports. As per sources, Big Data Analysis done by various authorities, despite importers are paying GST, they are supplying goods without the bill.
GST Evasion Taking Place via Black Marketing and Undervaluing Imports
Importers usually pay integrated goods and service tax or IGST on goods that they bring into the country. This Tax is should set-off apart from the actual GST which is being paid by the customer or claimed as refund. As per the results obtained by various analysis, importers including big companies are paying IGST on important but are not accepting credit for the same.
Hence, as per sources, the supply of imported goods on domestic channels is being done without any kind of bill. A similar kind of thing is observed on cess charged on luxury and sin goods with companies paying it at the time of imports but not accepting credit or setting it off from final GST which is being paid by the consumers.
GST council, which is the main decision-making body of the new tax regime has discussed the tax evasion at its 26th GST Council meeting on Saturday.
The government wants to make a proper analysis of all the data and then catch all the suspects and take adequate action for it.
Since GST has been started by the government, monthly revenues of GST are going down. As per the analysis, only 73000 taxpayers are paying IGST as of nearly Rs 30, 000 but are not accepting refund for the same.
According to the data of IGST and cess which is paid on the import of goods as customs port show that over 33,000 tax payers have claimed over Rs 10,000 crore in excess of payment. As per some sources, the department will follow some risk-based factors in order to identify potential evaders, by keeping an eye on the proprietor and partnership firms.
Goods and Service Tax came into existence from July 1, 2017, which has merged up various local taxes including excise, service tax, and VAT. According to the data provided by various revenue authorities, Rs 16, 965 crore worth IGST refund claims have been filed with Customs systems from July to January period. Here, Rs 4,815 crore has been approved as refunds, out of Rs 9,760 crore worth eligible claims.
AMRG and Associates Partner Rajat Mohan said, Beginning of Data Analytics will be helpful as Government will be soon able to identify all tax evaders.
He also said, “I feel authorities could unearth rampant tax evasion by importers of luxury products or mobile phones wherein goods could have been imported at considerably low values and post-import such products are sold in black market without payment of taxes. Government coping with low collections, would use the data analytics to attack tax evaders”.
According to the report of Finance minister, GST Revenue is decreasing every month. It was Rs 93,590 crore in July, Rs 93,029 crore in August, Rs 95,132 crore in September and Rs 85,931 crore in October. The GST collections in November were Rs 83,716 crore, in December (Rs 88,929 crore) and January (Rs 88,047 crore).
Due to above reason, Government is taking effective steps in order to identify tax evaders from the society and take legal action. Thus, GST Evasion Taking Place via Black Marketing and Undervaluing Imports.