Traders come under scanner for evading GST

Traders come under scanner for evading GST

The GST Council suspects many traders are understating their revenue by using the simplified composition tax scheme.

"The states are ascertaining the data. We will take action once we are clear," Sushil Kumar Modi, Bihar deputy chief minister and member of the council, told DH.

Modi is also the head of the group of ministers (GoM) tasked with sorting out GST Network glitches.

Most returns filed under the composition scheme show revenue below Rs 20 lakh, fuelling suspicion.

"If your turnover is less than Rs 20 lakh, you don't even need to register under GST," Modi said.

In the last quarter, 7.5 lakh traders filed their returns under the composition scheme, generating a tax inflow of Rs 310 crore.

Under the composition scheme, traders with a turnover of less than Rs 1.5 crore are required to file returns only once in three months. They avoid tedious GST formalities by paying between 0.5 and 2.5% on their turnover.

A senior tax official from Karnataka told DH: "We will be issuing notices as soon as we analyse the data. We have not issued any notices on the composition scheme yet."

The move comes in the wake of falling GST revenues for the government. GST revenues dipped to Rs 80,808 crore in December 2017.

According to data available with the finance ministry, 99.01 lakh taxpayers have registered under GST till December 25, of whom 16.60 lakh are under the composition scheme.

An expert said going after taxpayers in the composition scheme may not be the right way to go.

"Their playing field is limited. Getting accurate details of credits from large taxpayers should be the way to go," tax consultant Mohan Lavi said.

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