Nagpur: The government has detected evasion of Goods and Services Tax (GST), which also includes Central Excise and Service taxes prior to 2017, to the tune of Rs93,375 crore.
This was revealed in a RTI reply by the Directorate General of GST Intelligence’s (DGGI) various zonal units in major cities across India, including Delhi, Mumbai, Pune, Ahmedabad, Chandigarh and others.
Earlier, tax evasion of Rs9,359 crore had been reported by the Delhi headquartered DGGI office over the last six financial years, again in reply to a RTI query, which was reported by TOI on January 9.
The evasion of Rs93,375 crore came to fore from over 7,000 notices sent to various tax defaulters by the law enforcement agency working under the Union ministry of finance between financial years 2011 and 2021.
Stunned by non-recovery of such a huge amount, RTI activist Abhay Kolarlar, who had filed queries in this regard, has dashed off a letter to Union finance minister Nirmala Sitharaman pointing out DGGI’s failure to monitor tax evasion and also to act against defaulters for over a decade.
“The Government of India has established DGGI to control evasion of Central Excise, Service Tax and GST. It appears this agency has failed to control tax evasion and its quantum is rapidly increasing day by day. As a result, the hard-earned money of a common man is going into the pocket of tax evaders,” he mentioned in the letter.
According to him, DGGI had registered thousands of cases of tax evasion in the last ten years, involving evasion of nearly one lakh crore rupees, if cities like Chennai and Kolkata are taken into account, whose figures are not known. “We have calculated a figure of Rs93,375 crore through replies received from various DGGI offices across the country. It clearly shows that the tax evasion from GST and other taxes is increasing every year, thus leading to economic inequity in the society,” he said.
Stressing on the need to reform the tax administration system, the activist has made a few suggestions to Sitharaman for monitoring evasion and recovering the amount. Pointing out that the Central Board of Direct Taxes (CBDT), and Central Board of Indirect Taxes and Customs (CBIC) have failed to punish evaders by sending them to jail, Kolarkar called on her to strengthen the prosecution, and monitoring of cases, and publish their details on the DGGI website.
“The finance ministry should direct CBIC and CBDT and their directorates to publish their annual performance report on their website. It should also fill up around 80,000 vacant posts, preferably with chartered accountants, cost accountants, data analysts and law graduates for effective control on evasion. It should allow rebate of any other tax (road, property, GST) from income tax up to a certain limit,” he said.
SUGGESTIONS FOR FINANCE MINISTER
* Conduct study to find quantum of tax evasion
* Strengthen prosecution & monitoring of cases
* Appoint 20,000 specialised officers in CBIC & CBDT
* Fill up 80,000 vacant posts in CBIC & CBDT
* Reduce tax rates of indirect taxes from 18% to 12%
Source: timesofindia.com
Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
