India’s data mining unearths under-invoicing or cash deals at 200 firms

India’s indirect tax department has issued notices to around 200 companies after data mining revealed they could be guilty of evading the goods and services tax (GST).

The data showed that the firms could be under-invoicing or selling goods on cash terms.

The data mining has raised red flags in situations where the value of goods declared did not match the invoices of those goods.

Reporting requirements

Indian traders must fill in an online form, GSTR1, by providing details including the value of the product, tax rate and amount of tax.

Traders must also fill in self-declared returns, GSTR3B, which is an online form that summarises sales and purchases without showing invoice-level detail.

Data mismatchs

Now it appears that the tax department is looking at firms where the total declared on their GSTR3B differs from the sum of the GSTR1s submitted or where profit margins appear inconsistent with market norms.

Tax officials said the high levels of purchases compared with low levels of sales they found at the 200 firms indicated under-invoicing or selling products at lower prices officially and accepting cash from buyers to make up the shortfall.



Categories: Trade Based Financial crimes News

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