The Gujarat State GST Department conducted a series of coordinated search operations on May 2, 2025, targeting seven manpower service providers operating across Mehsana, Ahmedabad and Junagadh districts. The enforcement action was carried out based on specific intelligence inputs and extensive surveillance.
During the searches, GST officials unearthed significant irregularities in tax compliance. It was revealed that some service providers had collected GST from various government departments but failed to remit the same to the government treasury. Officials also discovered that certain taxable services were misclassified as exempt, indicating deliberate attempts to evade tax obligations.
Furthermore, investigators found evidence of wrongful availing and utilization of Input Tax Credit (ITC), suppression of actual turnover and the maintenance of parallel books of accounts. These actions are clear violations of the CGST Act and point towards systemic efforts to manipulate records and underreport taxable income.
The estimated tax evasion in this operation is believed to exceed Rs. 15 crore. Authorities noted that this figure may rise further as the cross-verification of documents and financial data is still underway.
A spokesperson for the Gujarat GST Department stated that the operation underscores the department’s resolve to ensure tax compliance and protect government revenue. The department emphasized that intelligence-led enforcement activities will continue, especially targeting high-risk sectors prone to tax fraud.
This enforcement action comes as part of a broader strategy by state GST authorities to clamp down on non-compliant entities and ensure transparency in the services sector, which has witnessed increasing scrutiny due to frequent tax evasion practices.
CAclubindia
