GST Department targets 30 B2C Sectors to track Tax Evasion

In an effort to broaden and strengthen the tax net, the state GST department has chosen 30 business-to-consumer (B2C) sectors to monitor tax evasion and bring unregistered merchants under its jurisdiction.

These include rented wedding attire, footwear, salons, non-clinical beauty treatments, ice cream parlours, textile sellers, tobacco traders, battery traders, mobile phone and accessory dealers, hotels and restaurants, artificial flower and decoration sellers, and coaching classes, to name a few.

Based on reliable sources in the SGST department, while many registered traders underreport their revenue, numerous unregistered dealers earn more than the mandatory GST registration threshold yet do not register. The state presently has roughly 12 lakh registered dealers, but officials fear the true figure might be much higher.

“We are concentrating on expanding the tax base. Many taxpayers in the B2C segment fail to record their entire income, and some undertake transactions without submitting right bills. Furthermore, many traders and service providers remain unregistered under GST, although having a turnover that exceeds the threshold level. Our goal with this exercise is to increase the number of taxpayers and reduce tax evasion,” stated a senior GST official.

Over the last few months, the department has conducted significant raids across Gujarat, detecting evasion of Rs.20 crore.

“Personal accounts of friends and relatives are frequently used to collect payments using QR codes, resulting in an inaccurate representation of the actual volume of transactions. This is a widely used strategy in Gujarat’s B2C sector cases that we have discovered thus far,” according to a source familiar with the situation.

Speaking on condition of anonymity, A chartered accountant said, “There is a nationwide push to expand the tax net, and Gujarat is no exception. The department is gathering data from multiple sources to identify persons performing transactions without proper billing. Registered traders supplying items to unregistered sellers also come under investigation. For example, if items are delivered using an e-way bill, the department can monitor large purchases made by unregistered dealers and assess their turnover to assure compliance.”