Tax evasion of Rs 50,000 cr detected in last 1.5 years

The Central Board of Indirect Taxes and Customs (CBIC) investigation wing has detected tax evasion of over Rs 50,000 crore during the last one-and-a-half years. While Goods & Services Tax (GST), which was implemented in July 2017, accounted for less than 10% of the total evasion detected, the rest of cases booked during April 2017-September 2018 comprised central excise and service tax evaded during the old tax regime.

The tax sleuths can register cases of tax evasion of the last five years.

GST evasion of Rs 4,441 crore has been found in 604 cases registered during July 2017-September 2018, as per the data available with the Director General of Goods & Services Tax Intelligence (DGGI), which functions under CBIC.

Of the total number of tax evasion cases of Rs 50,109 crore, as many as 3,142 cases of evasion of service tax and central excise totalling Rs 45,668 crore were detected by the investigators during April 2017 and September 2018.

As many as 2,787 are related to service tax and involve Rs 39,047 crore while 355 cases of Rs 6,621 crore pertain to central excise.

Explaining the high incidence of tax evasion during earlier regime, tax expert Pratik Jain of PwC said that any single point of tax is always prone to evasion.

The data shows a slow recovery during the past one-and-a-half years. So far, CBIC has collected Rs 4,894 crore in 2,104 cases of recovery of excise and service tax registered during this period. The tax recovery rate is, however, better in the GST regime. As much as 57% of the tax evasion detected has been recovered so far, as compared to 9% recovery seen in old cases registered this year.

Experts say that the GST tax evasion could be much higher than what has been detected so far. "Tax evasion measures started in the last few months. Earlier, the emphasis was more on the acceptance of the new tax regime by taxpayers," said Shashi Bhushan Singh, former member of Central Board of Excise and Customs (CBEC), now renamed CBIC.

As far as recovery is concerned, "there is a long process. First, the cases have to stand the scrutiny during adjudication. Once they are confirmed, many a times the firm is not traceable or doesn't pay. A lot of revenue is also held up as the cases go on in the court for very long while only a part sum is paid to the government during the process," said Singh.