GST officials finding ‘missing links’ in supply chain through data analysis

Goods and Services Tax (GST) officials are using data analysis to spot tax evasion in the supply chain of a particular sector. Through this, the officials are ascertaining whether tax evasion has taken place at any stage in the supply chain. Tax evasion of more than one lakh crore rupees has been detected in the last financial year. In such a scenario, the Directorate General of GST Intelligence (DGGI) has intensified its efforts to detect tax evasion at the initial stage itself to improve compliance.

An official told PTI, “We are doing an ‘end-to-end’ analysis for any sector and assessment of tax payments in the supply chain to find out if any such link has been missed, in which tax has not been paid. Data analysis compares tax payments in an area with payments made in the previous product and service tax regime. “Now that the GST system has stabilised, we are trying to streamline it further. We want to find out whether all the sectors under GST are paying their share of taxes.

After analysis, if the department feels that there is a need for some changes in the law or duty, it will be placed before the GST Council for approval. “Data analysis is a lengthy process, but it is necessary to check GST evasion at the manufacturing stage itself,” the official said. This will help in increasing revenue while ensuring improvement in compliance.

Rajat Mohan, senior partner, AMRG & Associates, said the DGGI has been empowered with several technology tools to identify high-risk areas. Tax evasion of over Rs 1.01 lakh crore has been detected by the tax authorities in the financial year 2022-23. Tax evasion has almost doubled on an annual basis. DGGI has recovered Rs 21,000 crore during this period.

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