In 2023, the Directorate General of GST Intelligence (DGGI), the primary investigative agency for GST matters, uncovered 6,323 cases of tax evasion amounting to Rs 198,324 crore. The Department of Revenue, Ministry of Finance, revealed on Thursday that this detection resulted in the voluntary payment of Rs 28,362 crore in taxes, and 140 individuals were arrested for their involvement in GST evasion. The figures mark a significant increase compared to 2022, where DGGI detected 4,273 cases involving evasion of Rs 90,499 crore, leading to voluntary payments of Rs 22,459 crore and 97 arrests.
Notably, the DGGI identified 2,335 cases of Input Tax Credit (ITC) fraud amounting to Rs 21,078 crore in 2023. This resulted in voluntary payments of Rs 2,642 crore, and 116 masterminds were arrested. The ministry highlighted that the sectors with significant GST evasion included online gaming, casinos, insurance, secondment (salary of expat employees), and fake ITC. Non-compliance in these sectors was emphasized as a threat to fiscal stability with potential social, financial, and economic security implications, according to the ministry’s statement. The GST department issued tax demand notices of Rs 1.12 lakh crore to various online gaming companies. However, these demands are currently under litigation, as the online gaming industry is in disagreement with revenue departments regarding taxation on online gaming. Additionally, notices were served to multiple insurance companies in 2023 concerning fake input tax credit claims.
Regarding the issue of salaries paid to expat employees, the Central Board of Indirect Taxes and Customs (CBIC) provided relief to multinational corporations (MNCs). It stated that non-payment of GST on expat salaries is a matter of interpretation and urged tax authorities to exercise caution before issuing tax evasion notices to Indian subsidiaries of MNCs in relation to expatriate manpower deputed from abroad.
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