“Tax evasion under the GST regime in India has seen evolving and complex trends, impacting both revenue and compliance”. Examine these trends and suggest measures to strengthen enforcement and improve compliance.
Kartavya Desk Staff
Topic: Indian Economy and issues relating to planning, mobilization of resources.
Topic: Indian Economy and issues relating to planning, mobilization of resources.
Q6. “Tax evasion under the GST regime in India has seen evolving and complex trends, impacting both revenue and compliance”. Examine these trends and suggest measures to strengthen enforcement and improve compliance. (10 M)
Difficulty Level: Medium
Reference: IE
Why the question: Over seven years after the rollout of GST in July 2017, authorities are still grappling with multiple such instances of GST frauds, involving broadly similar modus operandi. Key Demand of the question: The trends of tax evasion under the GST regime, focusing on evolving frauds like fake ITC claims and fake firms. Measures to improve enforcement and compliance mechanisms. Structure of the Answer: Introduction: Briefly highlight the growth in GST frauds and the evolving nature of tax evasion since the rollout of GST in 2017. Body: Trends in Tax Evasion: Outline the key trends like fake invoicing, fraudulent input tax credit claims, identity theft, and undervaluation of goods and services. Measures for Improvement: Suggest measures like enhanced use of technology, stricter enforcement, real-time monitoring, inter-agency coordination, and legal reforms. Conclusion Conclude with the need for stronger enforcement frameworks and the use of technology-driven solutions to enhance compliance and reduce tax evasion.
Why the question: Over seven years after the rollout of GST in July 2017, authorities are still grappling with multiple such instances of GST frauds, involving broadly similar modus operandi.
Key Demand of the question:
The trends of tax evasion under the GST regime, focusing on evolving frauds like fake ITC claims and fake firms. Measures to improve enforcement and compliance mechanisms.
Structure of the Answer:
Introduction:
Briefly highlight the growth in GST frauds and the evolving nature of tax evasion since the rollout of GST in 2017.
• Trends in Tax Evasion: Outline the key trends like fake invoicing, fraudulent input tax credit claims, identity theft, and undervaluation of goods and services.
• Measures for Improvement: Suggest measures like enhanced use of technology, stricter enforcement, real-time monitoring, inter-agency coordination, and legal reforms.
Conclusion
Conclude with the need for stronger enforcement frameworks and the use of technology-driven solutions to enhance compliance and reduce tax evasion.