GST raids expose retail chain’s over Rs 100 crore tax evasion in Hyderabad

Hyderabad, Feb 9, 2024

In a major crackdown on a retail chain over alleged goods and services tax (GST) evasion, the commercial taxes department initiated raids on its various outlets in the city and across the state on Wednesday night.

Sources indicate that tax evasion amounted to over 100 crore during the initial phase of raids. The searches commenced on Wednesday night and continued till Thursday.

The raids were conducted at 12 locations across the state, including Hyderabad, sources said.

The raids encompassed over seven outlets of the chain throughout the city, including their headquarters in Gachibowli and a stock centre in Balanagar. Similar searches were conducted in Khammam and Karimnagar as well.

Acting on a tip regarding significant disparities in the pricing of footwear between purchase and sale, investigations revealed variances ranging from 100% to 400%, with no corresponding tax payments detected.

“Particularly concerning were the marked-up prices of unbranded products, which appeared to exceed the purchase prices by 100% to 300%,” a source said. “We are currently scrutinising the accuracy of the quoted purchase prices, and suspect serious discrepancies in claiming input tax credit.”

The input tax credit allows registered entities to offset GST paid on business-related purchases against their GST liability upon the sale of goods or services.

The records of stock maintenance revealed irregularities, with a stock worth at least 80 crore, and numerous discrepancies are under investigation.

“Once final assessments are made, the total fraud could exceed 100 crore,” sources added. More than 100 personnel from commercial taxes department participated in the raids and searches.

[The Times of India]