Union Finance Minister Nirmala Sitharaman should call for a meeting of the full GST Council to deliberate only on the root causes of GST frauds, said Amit Mitra, Principal Chief Advisor to the Chief Minister of West Bengal.

In a letter to the Finance Minister on Monday, he said the special drive against fake GST registrations launched in May last year has led to detection of 29,273 bogus firms involved in suspected input tax credit evasion of ₹44,015 crores. In a written reply to the Lok Sabha in July last year, the Finance Minister said that between 2020 and May 21, 2023, 43,516 GST fraud cases were detected involving ₹2,68,537 crores.

“We must admit that these figures are astonishing, shocking and immensely distressing and a testimony to the fact as to how deep rooted the tentacles of fraud are in the GST eco system,” he said.

The States relinquished their powers of indirect taxation for the implementation of the GST and are now largely dependent on the Central government for their share of tax revenue. Frauds of this magnitude are “extremely agonising” to the States.

Hence, corrective measures should be taken immediately to check “massive laundering of public money” and if needed, the entire GST eco-system should be overhauled for this purpose, he said.

Source: The Hindu