GST evasion of Rs20,000-cr detected in April-Feb FY19: official

The government has detected evasion of Goods and Services Tax (GST) amounting to Rs20,000 crore so far this fiscal and is taking more steps to check frauds and ensure better compliance, Central Board of Indirect Taxes and Customs (CBIC) member (Investigation) John Joseph said Wednesday.

Revealing this at an Assocham event in New Delhi, he said the department will soon be discussing the transition issues faced by the real estate sector after the reduction in GST rates.
Joseph said between April and February 2018-19, GST evasion worth Rs20,000 crore has been detected, of which Rs10,000 crore has been recovered.
He also said the tax officials on Tuesday detected fake invoice worth Rs1,500 crore, which was used to claim illegal GST credit of Rs75 crore.
“We have already recovered Rs25 crore and the rest is on the way,” Joseph said.
Stating that only 5-10 per cent of the businesses are “black sheep” and bring bad name to the industry, he said the government will take more measures to increase compliance, and act against evaders in a way such that genuine businesses do not suffer.
Joseph said the government has been dynamic in rationalising tax rates since GST rollout on 1 July 2017, while increasing compliance for 12 million registered businesses.
“In future, as GST moves forward, the rates need to consolidate. Across the world it is one rate, but it may not be possible for us to implement it here... because we have the poorest of the poor and the richest of the rich in the country. “What is good for the richest, cannot be the best for the poor. But five rates converging into two or three, depending on what the Council decides. This is the way forward,” he said.
Joseph also said the government will also be taking up the issue of passing on GST rate cut to customers.
The GST Council, at its meeting last week, decided to cut tax rates on under-construction apartments and affordable housing to five per cent and one per cent, respectively.
However, builders say they will not be able to claim credit for the taxes paid on inputs, like steel, cement.
The earlier GST rate on under-construction apartments and affordable housing was 12 per cent and eight per cent, respectively, with input tax credit (ITC).
The lower rates tend to deny ITC relief to the builders of under-construction flats which are already built but not yet sold to buyers.
Joseph said the real estate sector will have to raise the issue with the urban development ministry.
“You need to talk to them (urban development ministry). As revenue department we cannot give you any benefit of subsidy to that extent,” he said.