The indirect tax administration has shortlisted 50,000 fresh cases that will be taken up for goods and services tax (GST) auditing in the current financial year as part of efforts to increase compliance and widen the tax base, Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Johri said in an interview.
"We did about 30,000 GST audits (in 2022-23) pertaining to FY21 and FY22 at the central level. We detected tax evasion worth about Rs 17,000 crore at the end of the financial year 2022-23, and have made recoveries of about 18 per cent or Rs 3,060 crore so far," the CBIC chief said.
The recovery figure is likely to increase as there are "some spillovers which we are expected to conclude in the ongoing financial year," he added.
For FY24, the authority's target to audit 50,000 cases is based on risk parameters. There will be spillovers from earlier years too, he clarified.
GST audits or departmental audits are done to verify declared sales, taxes paid, refunds claimed, and input tax credits availed of by looking at tax returns and other records maintained by businesses. Any mismatch in information across different documents could raise a red flag.
Departmental GST audits picked up momentum in FY23, after businesses were given adequate time to adapt to the indirect tax regime rolled out in 2017. About the recently launched two-month special drive on May 15, Johri said it is meant to clean up the taxpayer base.
"We have shortlisted 30,000 cases for physical verification, of which, so far, 35 per cent or over 10,000 cases have been found to be allegedly involved in the generating fake registration to claim bogus input tax credit (ITC). So far, the department has detected about Rs 7,000 crore of bogus ITC during the drive.
"It is a concerted action with states meant to identify those taxpayers who on the basis of their behaviour and their footprint appear to be suspicious. First, we have generated a list of such taxpayers who appear to be very high-risk; all these taxpayers will be verified physically, just to ensure that they actually have a place of business," he said.
-- Shrimi Choudhary/Business Standard