GST dept crackdown on tax evasion in CG: Traders protest ‘undue actions' with ‘bandh'

Time of India

2 days ago

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Raipur: The State GST department in Ambikapur has taken action against businesses suspected of large-scale tax evasion.
However, traders have alleged that the GST department is harassing small business owners and engaging in illegal recovery by issuing inflated tax demands.
On bigger businesses, investigations were recently carried out at the premises of M/s Bansal Trading Corporation and M/s Laxmi Traders. M/s Bansal Trading Corporation was given a risk score of 10 on the GST portal, indicating a high likelihood of tax evasion. During the inspection, officials found no business-related ledgers or accounting software, such as Tally, at the premises, further reinforcing suspicions.
From 2017-18 to 2024-25, the firm reported a turnover of over Rs 158 crore but paid zero cash tax. Scrutiny of e-way bills for 2023-24 revealed purchases worth Rs 29.50 crore but reported supplies of only Rs 50 lakh. Officials suspect the firm sold goods directly to consumers while generating fake invoices for other businesses to enable fraudulent input tax credit (ITC) claims. This practice is believed to have caused significant revenue losses to both the Centre and the state.
During the probe, the proprietor of Bansal Trading Corporation admitted to irregularities and voluntarily offered to pay Rs 40 lakh in taxes. However, GST officials have demanded the submission of ledgers and supporting documents, which the business has yet to provide.
In a separate investigation, the department inspected M/s Laxmi Traders on May 30 and 31, 2025. The firm had a total turnover of over Rs 96 crore from 2017-18 to 2024-25, with negligible cash tax payments.
For 2023-24, it reported purchases worth Rs 11 crore but only Rs 7 crore in supplies. The proprietor acknowledged discrepancies and voluntarily paid Rs 17.55 lakh in taxes. This was the first action taken by the GST department against the firm.
Meanwhile, traders' associations across Ambikapur observed a complete shutdown on Sunday to protest against the action of the GST department. The call for a 'bandh' by the traders' body saw widespread compliance, with most shops remaining shut and business activities halted.
Protesting 'undue' actions, traders held a rally through the city. During the rally, they chanted slogans against the GST officials.
They clarified that while they do not object to departmental action, it must be fair and proper. The association highlighted cases where traders with an annual turnover of less than Rs 50 lakh have been issued tax demands of up to Rs 1 crore. They urged the govt to address the situation with sensitivity instead of strictness.
The Ambikapur traders' association submitted a memorandum to the tehsildar, addressed to the CM.