The State Goods and Services Tax (GST) department of Gujarat conducted thorough investigations into 79 mobile phone dealers situated in various cities, including Ahmedabad, Vadodara, Surat, Rajkot, and Bhuj. The investigation revealed a substantial case of tax evasion amounting to Rs 22 crore through the unjustifiable claims of rebates by these companies, reported TOI.
Senior officials overseeing the investigation disclosed that the companies involved in this tax evasion scheme were procuring mobile phones using legitimate tax invoices but selling them without issuing bills to customers. This maneuver allowed them to misuse the rebate facility typically intended for authorized transactions and systematically evade tax liabilities.
Among the 79 dealers under scrutiny, a significant majority of 57 were located in Ahmedabad, while Surat and Vadodara had eight and two companies, respectively, implicated in the wrongdoing.
What further complicated the matter was the apparent lack of proper record-keeping by most of these dealers. They failed to maintain essential details about mobile phone manufacturers, specific model numbers, International Mobile Equipment Identity (IMEI) numbers, and other crucial transaction information. This lack of documentation made it challenging to trace the sales and ensure tax compliance.
The searches carried out by the GST department led to the discovery of over 500 mobile phones with no recorded entries in their records. Consequently, authorities were able to recover approximately Rs. 3 crore in unpaid taxes from these vendors.
The investigation is still ongoing, as officials continue to delve deeper into this case of tax evasion to uncover further irregularities and hold those responsible accountable for their actions.
Recently, the Gujarat State Finance Minister Kanubhai Desai has announced strengthening the rules for the Goods and Services Tax (GST) registration due to an increase in the individuals engaged in fake billing for claiming Input Tax Credit (ITC) claims. The Finance Minister mentioned that the GST registration will have a mandatory police verification as followed in the Passport verification mechanism before the House on the first day of the Monsoon Session.
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