Union government’s GST failure affecting its coffers
Hasty implementation of the GST, and numerous technical glitches because of that, have resulted in loopholes in the various processes, ensuring the government of India losing out on revenue of more than Rs 40,000 crore for consecutive years.
The goods and services tax (GST) was implemented in a hasty manner by the Union government, which attracted a lot of flak at the time it was being implemented, with critics ranging from well-known economists to several state governments.
Now, the hasty decision is taking a toll on the Union government’s coffers. The government’s own data is saying that nearly Rs 1 lakh crore worth taxes were not submitted to the government. The gaps in the system have helped unscrupulous businesses take the opportunity to escape from paying their dues. The rate at which this tendency is growing is also making government economists stressed.
In the 2019-20 fiscal, nearly Rs 41,000 crore worth of GST wasn’t paid to the government, and this number rose to Rs 49,400 crore in the 2020-21 fiscal, amidst the COVID-19 pandemic and the resultant lockdown beating down on people’s lives.
In 2019-20, 10,000 cases of tax evasion were identified, which increased to 12,500 the following fiscal.
This trend hasn’t changed in the current financial year (i.e., 2021-22), as the government has noted that nearly Rs 7,000 crore worth GST was evaded, from just April to June.
The government is grappling with the tax evasions and the input tax credit (ITC) hoaxes. Unregistered companies have scammed the government of Rs 31,000 crore in the last financial year (2020-21), in nearly 7,500 instances.
The loopholes in the portal for submitting GST and lack of adequate infrastructural support for people not conversant with the rules of electronic filing, which is compulsory in the case of GST, has led to the mushrooming of these unscrupulous activities. The government’s lackadaisical attitude is leading to a skyrocketing of these incidents, say experts.
