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Kerala Kaumudi Online
Saturday, 15 June 2024 4.04 PM IST

GST raid uncovers 209 crore tax fraud in major scrap shops

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Intelligent people in the trade field are the ones who find the possibility of trade even in things that are thrown away as useless. On top of the profit potential of that trade, the ones who find a loophole for the fraud of tax evasion should be called "monsters of hypocrisy"! The extent of such staggering tax evasion came to light during the lightning raid conducted by the GST Intelligence-Enforcement Departments in the state's major scrap shops yesterday. A 209 crore embezzlement was found in 101 centers across seven districts!

The four leaders of the network formed by 149 scrap shop owners from different districts were arrested on Thursday. The true size of the 'iceberg' will come out only when they are interrogated in detail. The fraud involved misuse of the input tax credit system in GST. That is, input tax credit is obtained by deducting the tax paid at the time of purchase from the tax received at the time of sale. This will be refunded when the tax documents are submitted to the GST department. Meanwhile, the fraud involves creating fake registrations in the names of many people and obtaining undeserved input tax credit refunds by submitting fake documents. A leakage of 209 crores was done by creating fake documents that the trade of 1170 crores was conducted!

This incident reveals that while the government's tax revenue has increased with the introduction of the Goods and Services Tax (GST) scheme, traders are evading crores of tax by taking advantage of loopholes in it.

GST came into force in July 2017. All the taxes which were very high till then were brought down to a maximum of four slabs. The highest is 28 percent. It is estimated that after GST, the tax amount is higher than what the government received before when the tax was 90 percent and 70 percent.

When the amount to be paid as tax is huge, it means that traders are looking for fraud and evasion. At the same time, some are finding loopholes in the new system too. It is the responsibility of the Government and the GST Department to ensure that there is no evasion of the input tax credit facility, which is convenient for the traders. Not only should the tax structure and tax collection be changed from time to time, all the culprits should be arrested and punished according to the law.

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TAGS: EDITORIAL, GST, TRADE, CORRUPTION
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