Massive GST Evasion Unearthed: Rs 14,302 Crore Detected in April-May 2023

In a written reply to the Lok Sabha on Monday, Finance Minister Nirmala Sitharaman said that GST evasion of Rs 14,302 crore was detected in the first two months of the current fiscal year, April-May 2023. Of this amount, Rs 5,716 crore was recovered. 28 persons were also arrested in connection with the evasions.

Key points regarding tax evasion and related actions of the current fiscal year is as follows

Goods and Services Tax (GST) Evasion: In the first two months of the current fiscal year, there were 2,784 cases of GST evasion involving Rs 14,302 crore. During this period, the authorities managed to recover Rs 5,716 crore. In the previous fiscal years between 2020-21 and 2023-24 (April-May), GST evasion of over Rs 2.68 lakh crore was detected in 43,516 cases, and a recovery of Rs 76,333 crore was made. Additionally, 1,020 persons were arrested in connection with these cases.

Income Tax Evasion: The Income Tax Department conducted searches on 3,946 groups over the last five years and seized assets worth Rs 6,662 crore. In the fiscal year 2022-23 alone, 741 groups were searched, and assets worth Rs 1,765.56 crore were seized.

Outright Smuggling: The Customs Department detected 42,754 cases of outright smuggling over the last four years, involving a value of about Rs 46,000 crore. In the current fiscal year (April-May), 2,986 cases of outright smuggling were detected, involving goods valued at Rs 1,031 crore.

Commercial Frauds: About 12,259 cases of commercial fraud were detected in the last four years, with a duty implication of Rs 21,225 crore.

Use of Technology and Data Analysis: The Income Tax Department and GST department are employing non-intrusive methods, data analytics, and artificial intelligence to detect tax evasion and identify risky taxpayers. They are also sharing data with partner law enforcement agencies for targeted interventions. The GST department is reducing the threshold limit for issuing e-invoices for B2B transactions to Rs 5 crore from August 1, 2023.

Customs Department's Efforts: The Customs Department, along with the Directorate of Revenue Intelligence (DRI), is actively engaged in detecting and curbing import-export-related commercial frauds. They use data analysis, risk management, intelligence development, and human intelligence to gather actionable information.