Bundles of Indian one hundred rupee bills are pictured at a bank in Mumbai, India (Photographer: Abhijit Bhatlekar/Bloomberg News.)  

Indirect Tax Evasion During April-October Stands At Rs 29,088 Crore

The Finance Ministry investigation arm detected tax evasion worth Rs 29,088 crore in 1,835 cases during the April-October period of the ongoing financial year, a senior official said on Wednesday.

Of this, the Directorate General of the Goods and Service Tax Intelligence, the enforcement agency for checking indirect tax evasion, detected evasion of GST worth Rs 4,562 crore in 571 cases.

The bulk of the evasion was detected in case of service tax. The total number of cases where service tax was evaded stood at 1,145 involving Rs 22,973 crore.

In case of central excise duty, the DGGI detected 119 cases where tax worth Rs 1,553 crore was evaded.

The official said the total amount of detection was likely to be more as the data does not include detection by field offices of the Central Board of Indirect Taxes and Customs.

On the recovery of evaded taxes, the official said a total amount of Rs 5,427 crore was realised during the seven-month period till October. These, he said, includes recovery from previous cases and those detected during the current financial year.

Of the total recovery, Rs 3,124 crore was from GST evaders, followed by Rs 2,174 crore in case of service tax, and Rs 128 crore from those who had evaded central excise.

The larger chunk of recovery during April-October in GST, the official said, can be attributed to the decision of the CBIC to tighten evaders.

With a view to focus on checking evasion, the apex indirect tax body had in September set up the Office of Commissioner GST (Investigation), headed by Neeraj Prasad.

Last month, the Finance Ministry had extended the informant reward scheme of central excise and service tax to GST. The scheme was modified to include officers of other government agencies like police, BSF, CISF and coast guard.

As per the reward scheme, informers and government servants were eligible for reward up to 20 percent of the net sale-proceeds of the contraband goods seized and/or amount of duty/ service tax evaded plus amount of penalty levied and recovered.

With respect to cases of detection of drawback frauds or abuse of duty exemption schemes under various Export Promotion Schemes, the informers are eligible for reward up to 20 percent of recovery of drawback claimed fraudulently and/or recovery of duties evaded.

GST, which subsumed 17 local taxes like excise and service tax, was rolled out on July 1, 2017. In the run up to launch of the new indirect tax regime GST, the ministry had renamed the Directorate General of Central Excise Intelligence, mandated to check service tax and central excise duty evasion, as DGGGI.