The State Goods and Services Tax (GST) department in Gujarat recently carried out extensive investigations into 79 mobile phone dealers situated in various cities, including Ahmedabad, Vadodara, Surat, Rajkot, and Bhuj. These investigations unveiled a significant case of tax evasion totalling Rs 22 crore, primarily stemming from unjustifiable rebate claims made by these companies.
Senior officials responsible for managing the inquiry revealed that the companies concerned in this tax evasion scheme were acquiring mobile phones through valid GST invoices but neglecting to provide bills to their customers when selling the phones. This deceptive tactic enabled them to exploit the rebate system, which is typically designed for legitimate transactions, and thereby systematically avoid their tax obligations.
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Among the 79 dealers subject to investigation, a substantial majority of 57 were located in Ahmedabad, while eight companies in Surat and two in Vadodara were found to be involved in these unlawful activities.
Adding to the complexity of the situation was the evident absence of proper record-keeping among the majority of these dealers. They neglected to maintain crucial information, such as details concerning mobile phone manufacturers, specific model numbers, International Mobile Equipment Identity (IMEI) numbers, and other essential transaction data. This lack of documentation posed a significant challenge in tracking sales and ensuring compliance with tax regulations.
During the GST department’s searches, more than 500 mobile phones were discovered with no corresponding entries in the dealers’ records. As a result, authorities managed to recover approximately Rs. 3 crore in unpaid taxes from these vendors.
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The investigation remains ongoing, with officials delving deeper into this tax evasion case to uncover additional irregularities and to hold those responsible accountable for their actions.
In a recent development, Gujarat’s State Finance Minister, Kanubhai Desai, has unveiled plans to bolster the regulations governing Goods and Services Tax (GST) registration. This decision comes in response to a growing number of individuals engaging in fraudulent billing to make false claims for Input Tax Credit (ITC).
The Finance Minister emphasized that the new measures will make police verification mandatory as part of the GST registration process, similar to the verification process employed for passport issuance. This announcement was made during the opening day of the Monsoon Session at the House.
