The Directorate General of Goods and Services Tax Intelligence (DGGI) has commenced an investigation into tax evasion of ₹850 crores in 2020-21 and 2021-22 through certain large commercial coaching centres and can issue show cause notices to them, expressed officials.
The scrutiny is concerned with the misdeclaration of the number of registrations and not paying the tax to the exchequer post-collection, they added.
The Directorate General of GST Intelligence started the probe in January 2023 and is looking into the transactions of all the bigger and mid-sized coaching centres in the country, as per the officials.
“Authorities have detected rampant tax evasion and at least 145 large and mid-sized commercial coaching centres are under the scanner,” one of the officials said for anonymity. The list includes academic coaching centres, retaining for medical and engineering entrance examinations also test prep centres for IELTS and GRE.
“These centres are based in Delhi, Mumbai, Kota, Kolkata, Chandigarh, Chennai, Coimbatore, and many other tier-2 cities. There have been some arrests as well,” the official quoted above expressed, declining to reveal the names of the coaching centres as the investigation is under process.
As per the officials in various cases, the coaching centres collected the Goods and Services Tax at an 18% rate on the tuition fees from their students however does not deposit the same. In certain cases, the centres had filed the returns availing that as a tax-exempt service, they added.
“In numerous cases they collected GST on the tuition fee and later exempted the same as a discount to students, and such students records were not maintained in the returns filed,” as per the officials mentioning that it was a straightforward breach of provisions of Section 132(1)(d) under the Center Goods Services Tax Act, 2017.
As per the officials, available information from the council shows a mismatch in earning the reports of the coaching centres. The DGGI seeks all the zonal offices to compile a coaching centres list which have not been enrolled under the GST till now.
