Checking GST evasion: Reward for informers on the cards

Almost a year after the Goods and Services Tax (GST) regime came into effect in July last, the Uttar Pradesh commercial tax department is gearing up to launch two parallel schemes to detect and check tax evasion, officials familiar with the matter said.

Almost a year after the Goods and Services Tax (GST) regime came into effect in July last, the Uttar Pradesh commercial tax department is gearing up to launch two parallel schemes to detect and check tax evasion, officials familiar with the matter said.

One scheme seeks to give cash rewards to those who help the department detect tax evasion. The second one aims at encouraging consumers to demand bills by giving them prizes through a periodical lucky draws. Besides, action will be taken against traders suspected to be evading taxes.

The reward scheme is patterned on a similar one run by the Central Board of Excise and Customs (CBEC).

Under this scheme, there is a proposal to give a handsome reward to informers who provide specific information leading to seizure of illegal goods or detection of tax evasion, including wrong declaration of quantity, description, value etc.

“The informers will get cash reward in proportion to the tax evasion money realized due to their tip-off and the reward money may be 10-20% of the value of goods confiscated and penalty realised,” a senior official said.

The CBEC scheme was doing very well, he said.

Under another scheme being given the final shape, consumers will have the chance of winning prizes like TV sets, refrigerators, air-conditioners and bikes if they make it a point to demand bills for any purchase above ₹500 and send the bills to the department on a WhatsApp number that will be made public.

“We will hold lucky draws of bills every month and the winners will be entitled to gifts in a move to inculcate into consumers the habit of demanding bills for anything they purchase,” the official said.

He said on the basis of a detailed analysis of bills sent by consumers, suspected dealers might be asked to come into the tax net if it was revealed that they were showing a lower turnover to avoid tax liability.

Joint director, special investigation branch (SIP), AK Singh said, “The department is chalking out two schemes, one for informers and the other for consumers. But the proposed schemes are yet to take a definite shape.”

The commercial tax department, then known as the trade tax department, had launched a similar scheme 15 years ago to encourage consumers to demand bills from the ‘mithai’ shops for a purchase made from them above a certain amount. The scheme that ran for two years was not found to have worked the way it was expected to.