As per the report of the Directorate General of GST Intelligence ( DGGI ) the GST evasion in construction amd works contracts crosses ₹10,000 crore in FY24.
The Directorate General of GST Intelligence, reported that more than Rs.8,900 crore of this amount is still unpaid by taxpayers. GST evasion in services last year came from construction services and works contracts. The main reasons were using fake Input Tax Credit ( ITC ), wrongly claiming exemptions or ITC, undervaluing services, and not paying taxes.
The DGGI found 1,813 cases of tax evasion, totalling about Rs.10,600 crore. During investigations, taxpayers voluntarily paid around Rs.1,640 crore. Last year, over Rs.10,000 crore in GST was evaded in works contracts and construction services, according to sources.
“Maximum amount of GST which has been evaded under services category in last fiscal (FY24) was from construction services and works contract via availment of fake Input Tax Credit ( ITC ), wrong availment of exemption notification / ITC, undervaluation, non-payment of taxes, as prime reasons of evasion by the taxpayers” the report noted.
According to the law and rules, ITC is not available for works contract services when supplied for the construction of immovable property (other than plant & machinery or where it is an input service for further supply of works contract service.)
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