Intensifying campaign against those involved in tax evasion by misusing the beneficial provision of Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime, authorities have unearthed tax fraud over Rs 35,000 crore during the financial year 2020-21.
During the financial year, 426 persons including fourteen professionals such as CAs, lawyers and masterminds, beneficiaries, directors, etc were arrested. Considering the high proportion of fake ITC availability and utilization, a nationwide special drive against the fake GST invoice was launched on November 9, 2020, which is continuing.
During the 2020-21 financial year, the Central Goods and Service Tax (CGST) zones and the Directorate General of GST Intelligence (DGGI) have booked about 8,000 cases involving fake ITC of over Rs 35,000 crore.
Campaign slowed down to pandemic
According to a statement of the Union Ministry of Finance, the drive against tax evasion was slowed down during the past two to three months due to COVID protocol and related safety concerns.
"With the gradual lifting of lockdown and improved Covid-19 situation in different parts of the country, the department has resumed the drive at the national level", the statement reads.
The crack-down by the Directorate General of GST Intelligence and all the Central GST formations against the fraudsters responsible for causing loss to the government exchequer has gained momentum during this month. In the nationwide drive against unscrupulous entities, the Directorate General of GST Intelligence and CGST Zones under CBIC, during the current financial year, detected more than 500 cases involving 1,200 entities and arresting 24 persons. The number of arrests made by officers of CBIC is one of the highest in recent times.
Tax defaulter misusing beneficial provision of ITC
The department admitted that misuse of the beneficial provision of ITC under the GST regime was the most common modus of evasion under the GST law. The field formations of the Central Board of Indirect taxes and Customs (CBIC) have been regularly detecting such cases from the very beginning of the GST regime.
CBIC officers are using the latest IT tools, digital evidence, and collecting information from other government departments to catch the fraudsters.
The official statement mentioned that along with legislative and procedural changes in the law, the nationwide drive has contributed to better compliance and revenue collection. During the drive, cases of fake ITC against some well-known companies were also booked.
Campaign against tax evasion to be intensified
The Finance Department announced that the enforcement drive against the fake invoice fraudsters and other GST evaders is likely to intensify to catch and book unscrupulous elements engaged in illegal activities to defraud the government exchequer.
Apart from cases of fake ITC the DGGI and other CGST formations have also detected GST evasion involving misclassification, undervaluation, and clandestine supplies of goods and services.
