GST Dept. issues 20000 Show Cause Notice to Defaulters for GST Evasion

The GST Department of the Central Board of Indirect Taxes and Customs (CBIC) has been started sending GST show-cause notices to a number of tax-evading firms that are underpaying taxes.

After 34,000 taxpayer accounts were examined during the first GST audit, nearly 20,000 notices for tax evasion were issued in FY 2017–18. About Rs.2000 crore was lost to tax avoidance. In 35,000 cases, the government is currently issuing additional notices for the financial year 2018–19.

Following that, the agency anticipates hearing back from taxpayers regarding notices, either confirming the existence of a tax demand or resolving the case without one. 95 percent of the 34,000 instances that were chosen for scrutiny were finished. In 50–60% of these cases, explanations for the short payment have been requested as a result.

The centre wants to make sure that a chosen group of taxpayers report input tax credits, supplier information, and tax payments correctly and consistently. The data is provided by the Directorate General of Analytics and Risk Management, the Directorate General of Advanced Analytics in Indirect Taxation, the GST Network, and the e-way bill portal, enabling the GST officers to examine taxpayers with a minimal interface. To find any inconsistencies, an income tax backend reconciliation is performed.

The rationalisation of the GST rate to lower the average GST rate has been postponed until 2024. To increase tax revenue collections by increasing compliance, the CBIC is therefore using alternative approaches. To stop erroneous claims for input tax credits and tax evasion, it is intensifying GST inspections and audits. The average monthly GST collection increased over the first seven months of the current financial year 2022–23 to Rs 1.49 trillion. The same amount for the previous financial year 2021–2022 was Rs 1.23 trillion every month.

An increase in GST revenue suggests that the government may get up to Rs. 1.5 trillion more than the Central GST (CGST) collections projected for FY 2022–23. States would also receive additional receipts for more revenue, providing the programmes with the essential funding they require. Prior to the implementation of the GST in July 2017, the GST revenue neutral rate (RNR) was around 15.5%. However, the average GST rate at the moment is around 11.5%.