The government has moved against 17,527 alleged tax evaders in the six months since the implementation of the new indirect tax regime of goods and services tax (GST). At nearly half of the total actions taken against tax evaders, the state of Uttar Pradesh tops the list, having acted against 8,413 tax evaders in the GST regime, according to finance ministry data.
Andhra Pradesh is at the second spot with 5,974 actions against tax evaders, followed by Kerala that has recorded 1,538 actions. Punjab has recorded 614 actions, followed by Odisha that has acted against 504 alleged tax evaders, the data showed.
Out of the total 17,527 actions, only one action has been recorded by the central tax authorities. Punjab is the only state where Centre has acted upon a tax evader, while rest of the 17,526 actions against tax evaders have been taken by state authorities.
No action has been taken against tax evaders so far in Maharashtra, Chhattisgarh, Haryana, Rajasthan, Tamil Nadu and West Bengal along with others such as Arunachal Pradesh, Assam, Goa, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland and Sikkim in the new indirect tax regime. Among the Union territories, Puducherry has recorded 4 actions against tax evaders in the GST regime, while data is not available for union territories of Chandigarh, Lakshadweep, Daman & Diu, Dadra & Nagar Haweli and Andaman & Nicobar Islands.
This is the first time that the government has detailed data for action against tax evaders in the new indirect tax regime of GST since its rollout from July 1 last year. The state governments’ action against tax evaders assumes significance amid growing concerns about declining revenues under GST.
In October last year, Central Board of Excise and Customs (CBEC) chairman Vanaja N Sarna had told The Indian Express that the enforcement authorities were only keeping a close watch on taxpayers on the margin of the exemption threshold and not taking any action during the six-month transition period, but may “strike later”. “Till such time, 6-7 months pass, and if I’ll see regularly this, particularly, some unit doing something which is clandestine, not including, not declaring and are aware … Today it’s difficult because when I am a supplier, I have the information. You are hiding it but I am the supplier. I have supplied to you and in my details I have mentioned you. Now, you may say that I am under Rs 20 lakh, and therefore, I don’t need to (file returns) but I have found that many people are supplying to you and as time goes by, and I find out that actually you should be in the net. So, I may strike later but at the moment I do not want to rush into it,” she had said.
The slip in monthly GST revenues below the targeted Rs 91,000 crore-mark October onwards has led to concerns among both the central and state government tax authorities. GST mop-up for November slipped to Rs 80,808 crore (as on December 25), the lowest since the July 1 implementation of the indirect tax regime. The government had garnered Rs 83,346 crore as total GST revenue for October (as on November 27), Rs 92,150 crore for September (as on October 23), Rs 90,669 crore for August (as on September 26) and Rs 94,063 crore for July (as on August 31).
In a bid to curb tax evasion, which is being seen as the major cause for declining GST revenues, the GST Council in a hurriedly called meeting on December 16 had approved an early implementation of e-way bill system. The Council had decided on January 16 as the rollout date for the e-way bill system on a voluntary basis for use by trade and transporters along with approving February 1, 2018, as the date for mandatory rollout for inter-state movement of goods, as against the earlier approved date of April 1. For both inter-state and intra-state movement of goods under the e-way bill system, the Council had approved the deadline of June 1, with states having the provision to choose their own deadlines for implementation of e-way bill for intra-state movement of goods before June 1, 2018.
While the government sees the e-way bill system as an effective way to curb tax evasion, it is also mulling bringing back other options such as invoice-matching and the reverse charge mechanism that were earlier deferred due to concerns raised by businesses.