As the monthly Goods and Services Tax (GST) collections crossed the Rs 1 lakh crore-mark in October, a sharp increase in both the detection of evasion cases and recoveries from them during the first half of this financial year could have played a key role in the collections surge. During the six months spanning April-September, the government detected evasion of about Rs 3,560 crore, a four-fold increase from the Rs 878 crore detected in July 2017-March 2018 — the first nine months of the implementation of the indirect tax regime.
The Directorate General of GST Intelligence (DGGSTI) has recovered Rs 2,300 crore in 360 cases, which is nearly 65 per cent of the total detection of Rs 3,560 crore evasion in 428 cases during April-September this year. This is in stark contrast from only about 27 per cent recovery of Rs 235 crore from detection of Rs 878 crore in 176 cases in July 2017-March 2018, government data showed.
Strictly comparable annual data for detection of evasion cases in April-September is unavailable as GST was rolled out from July 1 last year.
Revenue concerns were raised by several states in the 30th GST Council meeting held on September 28. As per the data shared in that meeting, six states/union territories – Mizoram, Arunachal Pradesh, Manipur, Nagaland, Sikkim and Andhra Pradesh — had posted a revenue surplus under the indirect tax regime, while rest 25 were facing a revenue shortfall ranging from 3 per cent to 42 per cent.
“In the last meeting of GST Council, there was emphasis on enforcement actions, both at central and state level, as many states felt there was high incidence of evasion and they were lagging behind in their revenue collections. States do not want to excessively rely on compensation as the present arrangement is only for first five years of GST rollout and they need to think of revenue mobilisation beyond those five years,” a government official said.
Use of technology for carrying out analysis of data sourced through e-way bills and GST returns are helping the tax authorities to check evasion under GST, the official added.
The focus on anti-evasion measures such as the implementation of measures like TDS/TCS and the use of technological tools is likely to continue going ahead in order to meet the zone-specific targets under GST, another official said.
With the GST collections for October (for sales in September) at Rs 1,00,710 crore, the government has cumulatively collected Rs 6,78,680 crore in the first seven months of 2018-19. The government had set a monthly target of Rs 1 lakh crore for GST, taking the annual target to Rs 12 lakh crore.
For central excise, the government has detected evasion of Rs 2,740 crore in 335 cases during April-September as against Rs 4,118 crore in 434 cases in the corresponding period last year. Out of the detected amount of Rs 2,740 crore, Rs 332 crore has been realised in 258 cases compared with realisation of Rs 172 crore in 288 cases in the same period last year.
Evasion worth Rs 21,167 crore has been detected for service tax in April-September, out of which Rs 2,975 crore has been realised. In the corresponding period last year, the government had detected Rs 6,296 crore of evasion, out of which Rs 1,389 crore was realised.