Rajasthan's State Tax Department has uncovered significant tax irregularities during its ongoing crackdown on suspected GST evasion and fraudulent Input Tax Credit (ITC) claims. According to reports from Business Standard, the department detected potential tax liability of ₹22.79 crore at over 25 establishments during the campaign against fraud and evasion over recent weeks. The latest developments show the probe has expanded with seven additional establishments identified during recent surveys, bringing the total affected establishments to over 25.
As reported by Business Standard, during the proceedings, the concerned taxpayers have so far deposited or reversed ITC amounting to ₹17.93 crore. A senior department official confirmed that further action regarding the remaining liability is currently underway. The department has also seized significant documents and records in several cases, with further investigations ongoing. The latest surveys have resulted in ₹70.59 lakh in voluntary deposits from taxpayers, demonstrating continued compliance efforts.
According to the official statement reported by Business Standard, a survey conducted at Angstrom Biotech in Bhiwadi on September 18 revealed that ITC had been claimed on purchases made from a supplier whose GST registration had already been cancelled prior to the date of the purchases. The investigation identified a potential tax liability of ₹60 lakh, against which the taxpayer voluntarily deposited ₹29.23 lakh. This case exemplifies the systematic nature of the department's approach to identifying and addressing fraudulent ITC claims.
As reported by Business Standard, excess ITC claims by Sevada Trading Company in Sardarshahar town, Churu district, from FY22 to FY26 were detected. The investigation identified a potential liability of ₹54.14 lakh, comprising ₹27.07 lakh each in central and state GST. The company voluntarily deposited ₹10 lakh during the proceedings, highlighting the department's success in identifying systematic fraud across multiple years.
The Rajasthan findings highlight broader national challenges in GST compliance, as evidenced by a recent CAG audit of Odisha's tax administration. According to the CAG Performance and Compliance Audit Report for the period ended March 2023, only around ₹110 crore was recovered against over ₹2,500 crore in GST demands, indicating substantial gaps between tax detection and realization. The audit examined 177,000 GST return cases between 2020-21 and 2022-23, revealing ₹1,078 crore in outstanding demands against only ₹19.94 crore recovery in eight selected circles.
