The Ministry of Finance has confirmed its continued efforts to combat tax evasion, with surveys being conducted under Section 133A of the Income-tax Act, 1961. Pankaj Chaudhary, Minister of State in the Ministry of Finance, revealed that the government has actively pursued individuals avoiding taxes, conducting 1,046 surveys in FY 2021-22, 1,245 in FY 2022-23, and 737 in FY 2023-24.
The disclosure came in response to a question in the Lok Sabha by MP Arun Kumar Sagar regarding the government's efforts to detect tax evaders and enhance taxpayer services over the past three years. The government's push to enhance tax compliance is evident in the increasing number of surveys conducted each year to identify non-compliant taxpayers.
Government's Initiatives to Improve Taxpayer Services
Chaudhary also outlined the various initiatives undertaken by the government to improve taxpayer services. Key measures include the digitalization of services related to return filing, payment processing, refund issuance, and faceless assessments through Aaykar Seva Kendra.
Further efforts in the Goods and Services Tax (GST) sector include the full digitization of services to streamline processes and enhance convenience for taxpayers. On the customs front, several initiatives have been launched to improve taxpayer services, such as the extension of export benefits via courier mode, IGST refunds for exports through Dak Niryat Kendras, and the introduction of an AI-based chatbot on the new ICEGATE website.
Consistent Growth in Tax Collections
The government's push for improved tax compliance is reflected in the steady growth of net direct tax collections in the past four financial years:
- 2021-22: Rs 6,55,072.81 crore (75% year-on-year growth)
- 2022-23: Rs 8,22,169.68 crore (25.5% year-on-year growth)
- 2023-24: Rs 10,19,017.99 crore (23.9% year-on-year growth)
- 2024-25: Rs 11,43,863.44 crore (12.2% year-on-year growth)
These growing figures reflect the success of the government's measures to enhance tax compliance and detect tax evasion, even as they continue to address gaps in the system.
Targeted Investigations into Foreign Remittances and GST Evasion
In August 2024, the Central Board of Direct Taxes (CBDT) launched an extensive investigation into large foreign remittances exceeding Rs 6 lakh to detect potential tax evasion. This initiative focuses on discrepancies in remittance records and aims to uncover individuals and businesses with undisclosed income.
The CBDT has identified several taxpayers who may be exploiting remittance provisions by splitting large sums into smaller amounts below the Rs 7 lakh threshold to avoid the 20% Tax Collected at Source (TCS).
In addition, the Directorate General of GST Intelligence (DGGI) uncovered a massive tax evasion network involving fake input tax credit (ITC) schemes, amounting to Rs 1.2 trillion since 2020. A nationwide two-month drive initiated in August 2024 aims to uncover fake GSTINs and take corrective action to protect government revenue.
DGGI's Crackdown on Fake GSTINs and Tax Evasion
The DGGI's efforts have led to the identification of approximately 59,000 fake firms under investigation. In a significant development, 170 individuals linked to fraudulent activities have been captured. The findings were shared at the national conference of GST enforcement chiefs, leading to further action to eliminate fake billers from the GST system.
Key Takeaways
- The Finance Ministry has ramped up efforts to combat tax evasion through targeted surveys and investigations.
- Consistent growth in direct tax collections highlights the government's successful efforts in enhancing compliance.
- The government's crackdown on fake GSTINs and large foreign remittances aims to safeguard tax revenue and deter fraudulent activities.
These combined efforts demonstrate the government's unwavering commitment to improving tax compliance, identifying evaders, and strengthening the overall tax ecosystem.
CAclubindia
