Government mulls raising GST evasion threshold to ₹3 crore

The government is contemplating a substantial adjustment in the threshold for arrests and criminal prosecutions related to Goods and Services Tax (GST) evasion. A recent report by The Economic Times disclosed that the government is considering raising the threshold from the current ₹2 crore to ₹3 crore.

The primary objective behind this proposed initiative is to ease the burden on businesses and promote a more conducive operational environment by decriminalizing certain aspects of tax evasion.

The Central Board of Indirect Taxes and Customs (CBIC), the apex body governing indirect taxes under the central government, is actively mulling over amendments aimed at refining the process of issuing summonses, reported ET.

These deliberations are anticipated to be presented before the GST Council soon, coinciding with potential pre-election amendments. Advocates for industry reforms are pushing for a more balanced approach to regulation, urging alterations in the penal code, continued the report.

Any amendments to the central and integrated GST Acts could align with the Centre's pre-general election considerations. Meanwhile, individual states are poised to make separate amendments to their respective GST Acts.

Proponents of the proposed changes argue that rationalizing thresholds for decriminalization could aid in addressing smaller or ambiguous cases. However, officials emphasize the importance of maintaining stringent measures for cases involving fake invoices and incorrect input tax credit claims.

Recent efforts by the Directorate General of GST Intelligence (DGGI) in tackling input tax credit fraud have yielded substantial results. Detecting 6,000 cases amounting to ₹57,000 crore in fraud, these efforts have led to 500 arrests. In the first half of the current fiscal year, the DGGI detected 1,040 cases of GST evasion, involving ₹1.36 lakh crore, resulting in a total of 91 arrests related to GST offences.

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