Srinagar, Oct 04: The recent Goods and Services Tax (GST) reforms aimed at easing compliance and lowering costs on essential commodities have been widely welcomed across industries and consumer groups. However, concerns are mounting over tax evasion practices in key sectors such as cement and automobiles, potentially undermining the benefits of the reforms.
The reforms announced last month include rate cuts on essential goods and the simplification of return filing procedures.
While the overall response to the reforms has been positive, industry insiders and tax experts here have raised concerns over the alleged misuse of the Input Tax Credit (ITC) mechanism by certain players in different industries.
According to sources, some manufacturers may be underreporting their production volumes to evade taxes.
As per sources, “Certain factories don’t show the amount of production that is actually being produced but show less than the actual in order to evade GST. The remaining output is being sold without proper invoicing, leading to significant revenue losses for the government,” sources informed.
Such practices involve manipulating ITC claims, they said.
The automobile industry has also faced scrutiny in the past over classification disputes and ITC misuse, though no recent cases have been officially reported under the latest reform regime.
The sources said that there is a need to keep strict vigilance in this regard and enquire any such practices of fraud here
