Union finance ministry has detected more than Rs 100 crore Goods and Service Tax (GST) evasion in Jammu and Kashmir from April to November 2018, prompting the state government to intensify drive against evaders.
According to official figures, the investigation arm of the finance ministry has detected tax evasion worth Rs 109 crore in 25 cases.
Tax evasion is an illegal action in which a person or entity deliberately avoids paying a true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.
Across the country, GST evasion worth Rs 12,766 crore in 3196 cases was detected during the same period.
J&K is already facing 28 per cent decline in revenue under GST during the April-August period. The state figured among the 10 states with highest revenue shortfall since the implementation of the one-tax regime.
A senior commercial taxes department official said that they have recovered Rs 40 crore of the evaded tax so far.
He said the department has launched a drive for inspecting businesses and checking e-way bills to prevent large-scale tax evasion noticed under GST.
“While the share of J&K GST to total GST of all the states is 1.2 percent, the compliance level in the state is only 0.27 percent,” he said.
“The departmental assessment has revealed around 30 percent leakage in the process,” he said and added that out of the total registered 92,000 dealers in the GSTN, till last month, only 52,000 trade and businesses were filing GST returns regularly.
“With the increased enforcement activities by the department, now 72,000 trade and businesses have filed returns for the month of October 2018,” he said.
Officials have detected violations and tax evasion in 70 percent of the cases they have inspected so far.
“Sustained efforts of the department against defaulters have resulted in a substantial increase in the monthly IGST settlement of the state,” he added.
Meanwhile, dismayed over nearly four-fold increase in tax compensation to Jammu and Kashmir post-GST implementation, the Union finance ministry has asked the state government to shore up tax collections as J&K has witnessed a drastic drop in its own tax collections post one-tax regime.
The GST was implemented in J&K despite facing stiff opposition from business community and general public in Kashmir.
According to official figures, the revenue losses post implementation of GST submitted by the state government before the Centre for compensation stands at Rs 1,307 crore from July 8, 2017. This loss is to be borne by the central government.