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GST Launches 'Operation White Pepper' to Combat Tax Evasion in Wayanad resorts

Last updated: 26 February 2024


In a proactive move to curb tax evasion and protect state revenues, the intelligence wing of the GST department has launched "Operation White Pepper," targeting major resorts in the district. Acting on credible information suggesting widespread tax evasion within these properties, the department initiated raids, resulting in the identification of significant tax discrepancies amounting to over Rs 20 crore in just five resorts.

Scope of the Operation

A total of 23 resorts were flagged as high-turnover properties, prompting the GST department to conduct thorough inspections. GST Deputy Commissioner (Intelligence), Sandhya T K, disclosed that while many resorts had been under surveillance for some time, the decision to intensify action was made this year. Despite the completion of inspections in only a few resorts, authorities have affirmed their commitment to continuing raids in the coming days to root out tax evasion.

GST Launches  Operation White Pepper  to Combat Tax Evasion in Wayanad resorts

Methodology and Findings

The intelligence wing employed meticulous investigative techniques, including undercover visits to resorts disguised as tourists, and even temporary stays to gather evidence. Shockingly, despite charging exorbitant rates, some resorts were found to be issuing bills to customers reflecting significantly lower amounts. This discovery points to a systematic effort to underreport revenue and evade taxes, thereby depriving the state exchequer of rightful revenues.

Impact on Tourism Industry

The timing of these raids coincides with challenging times for the tourism industry in Wayanad, which has been grappling with the aftermath of wildlife attacks, resulting in negative impacts on visitor arrivals. The enforcement actions undertaken by the GST department underscore the government's commitment to combating tax evasion, even amidst broader economic challenges faced by the tourism sector.

Conclusion

Operation White Pepper stands as a testament to the GST department's resolve to uphold tax compliance and preserve state revenues. By targeting resorts identified as potential hotspots for tax evasion, authorities send a clear message that tax evasion will not be tolerated. As the raids continue and investigations progress, stakeholders await further updates on enforcement actions and their implications for tax compliance in the hospitality sector.

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