India has been looking thoughtfully for a long time at the extreme hike in the threshold for arrest and criminal prosecutions in tax evasion cases. The Economic Times reported that the government is planning to revoke arrests for evasion below Rs 3 crore. To decriminalize and reduce certain aspects of Goods and Service Tax evasion, a proposal has been prepared to push the threshold from the existing Rs 2 crore to Rs 3 crore. This development comes amid the fostering of a favorable environment for conducting operations. In addition, many had already raised their voices and shown concerns about the severity of current penal provisions. Meanwhile, the authority is contemplating a rise in the threshold for arrests and criminal prosecutions in GST evasion cases. If you are also scrambling to the web regarding the provision of an increasing threshold for GST evasion arrest and criminal prosecution, the following sections are waiting for you. Stick with this page and keep reading this article.
According to the reports, the proposal to increase the threshold from Rs 2 crore to Rs 3 crore, is part of an initiative to decriminalize certain aspects of tax evasion, fostering a favorable environment for conducting operations and reducing undue pressure on businesses. The apex body that governs indirect taxes under the central government is the CBIC (Central Board of Indirect Taxes and Customs). It is currently considering amendments to streamline the process of issuing summonses. A person familiar with the matter suggested that the contemplation revolves around making summons more restrictive and enabling their issuance only under specific conditions.
A senior officer shed light on the discussions involved in increasing the threshold for criminal prosecution to Rs 3 crore. However, the industry representatives had sought a threshold for Rs 5 crore. Presently, Section 132 of the Central GST (CGST) Act for GST evasion criminalizes above Rs 2 crores to warrant a three-year jail term.
The Directorate General of GST Intelligence launched a specialized drive last year in November targeting input tax credit fraud. They have detected 6,000 cases amounting to Rs 57,000 crore in fraud that led to the arrests of 500. The DGGI detected 1,040 cases of GST evasion in the first half of the current fiscal year, involving Rs 1.36 lakh crore. To input tax credit fraud Rs 14,000 crore of this amount is related. The enforcement actions have led to the arrest of 91 GST-related offenses in this period.