Armed with knowledge analytics and data from businesses, the federal government has launched an enormous crackdown on GST evaders, initiating motion in opposition to 7,000 entities together with arrest of 187 — a marketing campaign that contributed to buoyancy in tax assortment, Finance Secretary Ajay Bhushan Pandey mentioned on Sunday.
The authorities netted a document GST assortment of Rs 1.15 lakh crore in December 2020, helped by the motion in opposition to tax evaders alongside decide up within the financial system.
In an interview to PTI, Pandey mentioned motion in opposition to pretend invoicing racket in final one- and-a-half months has led to arrest of 187, together with 5 chartered accountants and one firm secretary.
“Many of them including some managing directors are in jail for last 40-50 days. There are few large companies which too are found involved in taking fake bills through multiple layers, thereby evading GST and income tax. So they have also been booked,” he mentioned.
The motion in opposition to those that attempt to misuse the system, he mentioned, has been primarily based on collating data from numerous businesses reminiscent of Income Tax Department, Customs unit, FIU and GST division and banks.
“We have taken action against 7,000 evaders out of a tax base of 1.20 crore. Hence our success rate is very very high,” mentioned Pandey, who can also be the Revenue Secretary.
He mentioned the Income Tax Department instantly follows up on all of the circumstances booked underneath GST pretend bill as a result of the tax implication is larger.
“Because of the data available, it is very very difficult to escape because sooner or later they will get caught,” he mentioned.
The secretary mentioned from April 1, e-invoice can be made obligatory for all B2B transactions by companies with turnover of over Rs 5 crore.
Electronic bill was made obligatory for B2B transactions by companies with turnover over Rs 500 crore from October 1,2020, and for over Rs 100 crore turnover from January 1.
Pandey mentioned the availability proscribing utilization of enter tax credit score (ITC) is an anti-abuse provision and targets shell firms.
“We have found many shell companies which are issuing invoices worth crores of rupees and not paying income tax and paying the entire liability through ITC. So in order to ensure that these companies are not able to abuse the system, this particular anti-abuse provision has been put in and this will impact less than 45,000 units in the entire tax base of 1.2 crore,” he mentioned.
After unearthing a rampant pretend invoicing rip-off to evade items and providers tax (GST), the Central Board of Indirect Taxes and Customs (CBIC) amended guidelines making it obligatory for companies with month-to-month turnover of over Rs 50 lakh to pay at the least 1 per cent of their GST legal responsibility in money from January 1.
The new rule restricts use of enter tax credit score (ITC) for discharging GST legal responsibility to 99 per cent.
GST collections surged to an all-time excessive of over Rs 1.15 lakh crore in December as financial actions picked up after lifting of stringent lockdown restrictions.
GST, which is levied when a consumable merchandise is bought or a service is rendered, in December was 12 per cent larger than such receipts in the identical month of 2019.
Pandey mentioned December has seen document assortment since GST implementation, which could be attributed to 2 elements.
“The trend suggests that the economy is picking up and we are seeing faster pace of recovery”.
“Also the measures like e-invoice, pre-population of information on supplier wise input tax credit, which deter those who are trying to claim excess ITC, are helping compliance. By targeted action against tax evaders by way of full data analytics, it is possible to pinpoint the entity which issued fake bill and also the ultimate beneficiary,” he added.
