Page 34 - GSTL_18th June 2020_Vol 37_Part 3

J68 GST LAW TIMES [ Vol. 37
turnover in Top Management, Directors, CFO, continued losses, NCLT applica-
tion, complicated ownership pattern may indicate.
Prevention Better than Cure
The best method of fraud mitigation is to remove the cause or bring fair-
ness in the law and its implementation. This needs correction at the foundation
and may take time. However, if taken up earnestly then we may see very less
evasion in time to come.
Let us list out some of the common factors why GST is evaded by the in-
dustry/trade :
(I) Change management of the unorganised SME, revenue officers
and IT literacy in a big way can make the advantages of being in
the mainstream, ease of complying a reality. This has failed mis-
erably. May be an outsourced service provider to see that this is
provided with online as well as physical help desk in every city
for 2 years could be the solution. The general level of morality on
tax payment needs to be enhanced.
(II) Pride in paying taxes should start with the elected representatives
not involving in evasion - cash dealing - benami properties - in-
spite of being in service of Nations able to increase their declared
wealth 10 fold or more in 5 years tenure!! Traditionally service
providers whether Doctors, Advocates, finance professionals de-
termine the amount to pay which has no relation to the income!!
Time to bring all of them who earn well to book. May be 10% pay
correctly.
(III) Inflation in land prices denotes all the wrong things. It appears to
be in a reduced way - but still the cash vs cheque component is a
reality. Not to mention the high level of corruption in registrar
office. Almost impossible to be honest there.
(a) All of law abiding citizens purge our conscience when we
buy immovable property.
(IV) The earlier system of not keeping proper records was supported
and encouraged by Central and State Govts. : Examples could be
deemed income for certain activities - say 6% of TO, composition
scheme under VAT. The practice of scrutiny led to sanctifying the
evasion by payment of a share to the tax officer if picked up.
Many of the big frauds are in collusion with the tax administra-
tor. Some postings demand 5 crore to be paid!!!
(a) Now focus on keeping accounts started, regular returns, link-
ing of invoices - use of the power of information technology.
However, the gaps open for leakages are many : In GST mul-
tiple registration based on PAN nos. - leading to claim of 100s
of ` 40 lakhs exemptions or 100s of composition limit of ` 1.5
Crore.
(b) However old habits die hard. May take some time to onboard
all those who lived by evading tax.

GST LAW TIMES  18th June 2020  34