A Senior official stated that the tax department has been working to implement GST informant reward scheme to reduce the cases of tax evasion by unethical traders and businesses under the new indirect tax regime.
“The scheme is being planned to check tax evasion. Informers will be rewarded for providing specific clues regarding violation of GST laws”, said, official. By adding that, the revenue department would soon announce the informant reward scheme under GST.
Informers and government servants are entitled to receive a reward of 20 percent in respect of informing tax evasion, drawback frauds or abuse of duty exemption schemes under various Export Promotion Schemes. GST informant reward will be provided on a net sale-proceeds of the contraband goods seized and/or amount of duty/ service tax evaded plus amount of penalty levied and recovered.
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Government servants and informers would receive ‘GST informant reward’ after the final discussion of adjudication/appeal/revision proceedings and the closure of legal proceedings.
The informer who provides the information relating to the tax evasion or black money is entitled to receive Rs 5 crore, whereas, under the Benami transaction prohibition act, the informants are entitled to receive up to Rs 1 crore to inform the higher authorities regarding the Benami transactions or property.
After the implementation of GST which is being introduced on 1st July 2017, the Indian government had modified the name of Directorate General of Central Excise Intelligence (DGCEI ) to the Directorate General of GST Intelligence (DGGSTI ) to identify the cases of black money or tax evasion under the Good and Services Tax (GST).
Through the informant reward scheme, Directorate would be able to keep an eye on tax evasion activities under the GST.
AMRG Associates Partner Rajat Mohan stated that “What needs to be seen is whether the government would be generous enough to attract a bigger pool of information or would it be ‘penny wise pound foolish’.”
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Ernst & Young, (EY) Tax Partner Abhishek Jain reported, “This scheme is implemented, would aid in unearthing black money and checking tax evasion by businesses. Where successful, this could help boost tax collections by the government as well.”
Earlier the government had to implement the e-way bill, match-mismatch invoice, GST commissioner in every state, Reverse charge mechanism which was meant to indirectly add the unregistered dealers into the GST net.
Also, the GST officers earlier made surprise visits to the shops acting as a customer to find out the actual dealing in between the customer and the shopkeeper. This method proved useful for the officers to find any GST evasion held by the dealer.
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The main agenda is to seek a complete hold on the GST evasions and tap the leakage of taxes in the system. But implementation techniques on a regular basis may show another face of the government’s incapable authority.
