The Gujarat State GST Department has uncovered a significant tax evasion scheme amounting to over Rs 15 crore within the manpower services sector. Coordinated searches across Mehsana, Ahmedabad, and Junagadh districts revealed that several service providers collected GST from government departments but failed to deposit it. Irregularities included misclassifying services as exempt, wrongful Input Tax Credit claims, and maintaining parallel accounts to suppress turnover. The department vows to continue intelligence-led enforcement to ensure tax compliance.
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 b
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FAQ :
The estimated tax evasion uncovered in this operation is believed to exceed Rs 15 crore, with the figure potentially rising as investigations continue.
The operation specifically targeted the manpower services sector.
The searches were conducted in Mehsana, Ahmedabad, and Junagadh districts.
Methods included collecting GST from government departments without remitting it, misclassifying taxable services as exempt, wrongfully availing Input Tax Credit, and maintaining parallel books of accounts to suppress turnover.
The department has stated that intelligence-led enforcement activities will continue, particularly targeting high-risk sectors prone to tax fraud, to ensure tax compliance and protect government revenue.