Indicating need to step up more efforts in days ahead to collect tax, the Goods and Services Tax (GST) investigation wing has detected tax evasion of over Rs 2,000 crore in two months. India has registration of more than 1 crore businesses but only 1% of total registration paying 80% of the taxes. Central Board of Excise and Customs (CBIC) member John Joseph said alike small businesses who are making mistakes while filing GST returns, multinationals and big corporates too have slip-ups.
Joseph, who is also the Director General of Goods and Services Tax Intelligence (DG GSTI), stated that the analysis of composition dealers data shows that most of them have an annual turnover of Rs 5 lakh. He added that this shows that a lot of compliance is required.
Under the composition scheme, traders and manufacturers are allowed to pay taxes at a reduced rate of 1%, while restaurant owners have to pay at 5% rate. The scheme is open for manufacturers, restaurateurs and traders whose turnover does not exceed Rs 1.5 crore. Joseph further said investigation has revealed that a modus operandi is being followed whereby fake invoices are being generated for goods which have not been supplied at all. Based on these invoices, some entities are claiming input tax credit. Besides, without actually exporting goods, some entities are claiming GST refunds based on fake invoices.
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