In a massive crackdown on GST evaders, the government has initiated action against 7,000 entities including the arrest of 187 -- a campaign that contributed to buoyancy in tax collection. In an interview to PTI, Finance Secretary Ajay Bhushan Pandey said action against fake invoicing racket in last one-and-a-half month hs led to arrest of 187, including five chartered accountants and one company secretary.
"Many of them including some managing directors are in jail for the last 40-50 days. There are few large companies which too are found involved in taking fake bills through multiple layers, thereby evading GST and income tax. So they have also been booked," he said.
The government netted a record GST collection of Rs 1.15 lakh crore in December 2020, helped by the action against tax evaders alongside pick up in the economy.
The finance secretary said that the action against those who try to misuse the system has been based on collating information from various agencies such as Income Tax Department, Customs Unit, FIU, and GST department and banks.
"We have taken action against 7,000 evaders out of a tax base of 1.20 crore. Hence our success rate is very very high," he said.
Pandey, who is also the Revenue Secretary, said that the income tax department immediately follows up on all the cases booked under GST fake invoice because the tax implication is higher. "Because of the data available, it is very very difficult to escape because sooner or later they will get caught," he said.
The secretary said they have detected many shell companies that are issuing invoices worth crores of rupees and not paying income tax and paying the entire liability through ITC. "So in order to ensure that these companies are not able to abuse the system, this particular anti-abuse provision has been put in and this will impact less than 45,000 units in the entire tax base of 1.2 crores," he said.