As the Goods and Services Tax (GST) enters its seventh year — it was launched in June 2017 — the government is doubling down on plugging leakages in the tax system. The biggest disrupter of India’s business and economy in recent times, the GST has now stabilised but needs its own medicine. It was launched to remove inefficiencies in the earlier tax regime, and it has done that very well. Now it needs to remove its own inherent inefficiencies that cause leakage of tax.
In all these years, while the GST regime was stabilising, tax evasion grew. The GST evasion is on the rise with about 14,000 cases detected in 2022-23, up from 12,574 in 2021-22 and 12,596 in 2020-21. The evasion detection doubled to over Rs 1.01 lakh crore in 2022-23, while the Directorate General of GST Intelligence (DGGI) officers made a recovery of Rs 21,000 crore during the fiscal. In 2021-22, DGGI, the investigative agency under the Goods and Services Tax (GST) regime, detected evasion of over Rs 54,000 crore and made a tax recovery of over Rs 21,000 crore.
What the robust collections tell us
At the time of introducing the GST in 2017, the revenue collection from indirect taxes stood at Rs 7.19 lakh crore at the national level. With the implementation of GST, the revenue has now gone up to Rs 18.1 lakh crore. Similarly, since the introduction of GST, the number of taxpayers increased from 67 lakh in 2017 to 1.4 crore in 2023. In April this year, GST collections stood at Rs 1.87 lakh crore, the highest ever monthly collection since the introduction of GST six years ago. Collection of Rs 1.5 lakh crore every month has become a new normal.
While post-pandemic recovery of business activity and the resilience of India’s economy have driven the GST collections up, another significant reason is the government’s anti-evasion measures and efforts to increase compliance.
