Gujarat GST Detects Rs 45 Crore Tax Evasion in Central Schemes, Including MGNREGA

In a recent action, the Gujarat State Goods and Services Tax (SGST) department has uncovered tax evasion of over Rs 45 crore by some contractor firms working on Central government schemes. These irregularities were mainly found in projects under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in the Dahod and Gir-Somnath districts.

According to officials, at least four contractor firms were given tenders for rural development work. During the investigation, it was found that these firms created fake invoices and did not report all their transactions to avoid paying GST. The fraud was detected by the SGST team during a routine audit, which uncovered irregularities related to Input Tax Credit (ITC) claims and incorrect return filings.

The contractors were using tax credits they were not eligible for and hiding their real business turnover. Several of the projects were for tribal welfare and rural infrastructure projects. Authorities suggested that such schemes would not only mean loss of revenue to the government purse but also hide the real intent of these schemes to reduce poverty and develop rural communities.

The SGST department has commenced additional investigative work and may pursue appropriate actions under the GST Legislation criteria. This exposure further highlights the need for additional scrutiny of publicly funded programmes.