GST evasion of ₹2.02 lakh cr. found in FY24; over 40% in online-gaming
- Goods and Services Tax (GST) sleuths detected tax evasion worth almost ₹82,000 crore by 78 real money online gaming firms in 2023-24, but that translated into a voluntary recovery of just ₹53 crore.
Highlights:
- In 2023-24, GST authorities uncovered significant tax evasion amounting to ₹82,000 crore by 78 real-money online gaming firms, yet the voluntary recovery from these firms was a mere ₹53 crore.
- This reflected a broader trend of rising tax evasion across various sectors in India, as per data from the Directorate General of GST Intelligence (DGGI).
Online Gaming Industry Tops Evasion List:
- The online gaming industry emerged as the biggest defaulter in GST compliance, contributing to a sharp surge in the overall tax evasion detected last year.
- Out of the ₹2.02 lakh crore in evasion detected in FY24—double the amount from FY23—₹82,000 crore was attributed to the gaming sector alone.
- Despite these massive detections, the gaming firms only paid a negligible amount voluntarily, indicating the industry's resistance or difficulty in settling their dues.
Overall Tax Evasion Trends:
- Across all sectors, indirect tax evasion was rampant. The DGGI detected almost 6,000 cases in FY24, with 50% of cases related to non-payment of taxes through clandestine supplies or undervaluation of goods. Another 20% of cases pertained to the misuse of fake input tax credits.
- The total voluntary recovery across all cases was ₹26,605 crore from 4,520 cases. This was a rise from the ₹20,713 crore recovered in FY23, though the overall evasion had also seen a substantial increase.
Sectoral Analysis of Tax Evasion:
- In addition to online gaming, several other sectors were flagged as being prone to tax evasion:
- Banking, Financial, and Insurance Services (BFSI):
- Evasion detected: ₹19,000 crore.
- Voluntary recovery: ₹317 crore.
- Works Contract Services and Pharmaceuticals were also identified as high-risk sectors for tax evasion.
Goods Sectors with High Evasion:
- Among goods, the iron, copper, scrap, and alloys businesses were major defaulters:
- Evasion detected: ₹17,000 crore.
- Voluntary recovery: ₹2,300 crore.
- Other sectors with substantial evasion included:
- Pan Masala, Tobacco, Cigarettes, and Bidis: Evasion of ₹5,800 crore.
- Plywood, Timber, and Paper: Evasion of ₹1,200 crore, with ₹730 crore recovered.
- Electronic items, Marble, Granite, and Tiles: Evasion of ₹1,165 crore, with only fractional recovery.
Prelims Takeaways:
- Banking, Financial, and Insurance Services (BFSI)