Nagpur: The government has detected an evasion of Goods and Services Tax (GST), which also includes central excise and service taxes before 2017, amounting to Rs 93,375 million. This was revealed in an RTI response by the various zonal units of the Directorate General of Intelligence GST (DGGI) in major cities across India including Delhi, Mumbai, Pune, Ahmedabad, Chandigarh and others.
Previously, tax evasion of Rs 9,359 crore had been reported by the Delhi-headquartered DGGI office for the past six fiscal years, again in response to a query from RTI, which was reported by TOI on 9 January.
The evasion of Rs 93,375 crore was evidenced by more than 7,000 notices sent to various tax defaulters by the law enforcement agency under the Union Ministry of Finance between financial years 2011 and 2021 .
Stunned by the non-recovery of such a sum, RTI activist Abhay Kolarlar, who had filed petitions in this regard, sent a letter to Union Finance Minister Nirmala Sitharaman stressing the inability of the DGGI monitoring tax evasion and taking action against defaulters for over a decade.
“The Government of India has established DGGI to control the evasion of Central Excise, Service Tax and GST. It seems that this agency has failed to control tax evasion and its quantum is increasing rapidly day by day. As a result, an ordinary man’s hard-earned money goes into the pockets of tax evaders,” he mentioned in the letter.
According to him, the DGGI had recorded thousands of tax evasion cases over the past ten years, involving evasion of nearly one million lakh rupees, when considering cities like Chennai and Kolkata, whose the numbers are not known. “We have calculated a figure of Rs93,375 crore through responses received from various DGGI offices across the country. This clearly shows that tax evasion of GST and other taxes is increasing every year, thus leading to economic inequality in society,” he said.
Stressing the need to reform the tax administration system, the activist made some suggestions to Sitharaman to monitor the evasion and recover the amount. Pointing out that the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) have failed to punish tax evaders by sending them to jail, Kolarkar called on her to strengthen prosecutions and the follow-up on cases, and publish their contact details on the DGGI website.
“The Ministry of Finance should direct the CBIC and CBDT and their directorates to publish their annual performance report on their website. It is also expected to fill around 80,000 vacancies, preferably with accountants, cost accountants, data analysts and law graduates for effective fraud control. It should allow reimbursement of any other tax (road, property, GST) from income tax up to a certain limit,” he said.
SUGGESTIONS TO THE MINISTER OF FINANCE
* Conduct a study to determine the amount of tax evasion
* Strengthen the prosecution and follow-up of cases
* Appoint 20,000 agents specialized in CBIC & CBDT
* Fill 80,000 vacancies at CBIC & CBDT
* Reduce indirect tax rates from 18% to 12%