26.09.2023: Karnataka commercial taxes dept launches drive against coaching institutes evading GST

The Commercial Taxes Department, Karnataka, busted a prominent group operating multiple coaching institutes in Vijayapura for alleged evasion of Goods and Services Tax (GST).

Enforcement officials conducted simultaneous searches at the business and residential premises at the coaching institutes of the group and other commercial coaching facilities in the Vijayapura district.

“The officers seized incriminating records and digital evidence and the investigation is in progress. As a result of the search operation conducted, it is suspected that a substantial volume of turnovers has been suppressed, and tax has been evaded by the said group of coaching institutes. They have voluntarily deposited Rs 1 crore in GST pending final quantification of turnover and tax,” said C Shikha, Commissioner of Commercial Taxes (Karnataka) in a statement on September 21.

However, the department didn't name the group in the statement.

While coaching institutions are required to pay GST at 18 percent, sources said the institute failed to obtain registration under the GST Act for more than three years.

“The probe revealed that the coaching institutes have not obtained registration under the GST Act, although they were statutorily required to get registered. The coaching institutes appear to have not properly understood the GST implications of their business transactions and the department is in the pursuit of bringing all such institutes in this sector under the GST net,” Shikha said.

She added that the department is at the forefront of e-governance, employing software analytical tools to detect fraud and tax evasion. “We have adopted a zero-tolerance approach to acts of fraud and tax evasion by unscrupulous evaders. The department endeavours to ensure strict enforcement of taxation laws, which is pivotal in maintaining a level playing field for all businesses and securing GST revenue for public welfare and development,” she added.

Karnataka Chief Minister Siddaramaiah recently instructed commercial tax officers to take strict action against tax evaders in cases of tax evasion, tax leakage and tax pilferage in the state. He also said that the growth rate of tax collection by the state commercial tax department is 19.2 percent, which is higher than the country’s average of 15 percent. This year, the government has set a target of 24 percent.

Source: Money Control

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