RFID tags help detect GST evasion

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Goods and Services Tax (GST) officials are adopting modern technology to detect tax evasions. With the help of radio frequency identification (RFID) technology, multiple cases of tax evasions have been detected. Authorities have found discrepancies between electronic permits issued for transporting goods and the data collected from RFID tags that are used by commercial vehicles to cross toll plazas.

To transport goods worth more than Rs 50,000 within and across states, a GST-registered entity needs e-way bills. To detect tax evasion or theft of revenue, GST officials are comparing the details submitted at the time of generating e-way bills for the movement of goods with the actual movement of vehicles through the toll gates.

Deployment of technology

On July 5, the Central Board of Indirect Taxes and Customs (CBIC) in a communication to field officers said that officials have unearthed a racket. It was found that unregistered firms were caught transporting iron scraps with invoices made in the name of fake and non-existing firms, the Mint reported. They also recovered fake invoices transferring bogus tax credits of around Rs 14.5 crore. This was based on an analysis carried out by the Directorate General of GST Intelligence (DGGI) and risky vehicles were identified and put under the scanner.

The integration of e-way bills and RFID tags took place in January this year. With the help of this integration, the RFID tags had all information ranging from the transportation of the goods, classification of items, the proposed destination along with the details of the vehicle. This facilitates cross-checking. It also ascertains the details of vehicular movement specified in the document corresponding with the actual movement.

This is considered as a turning point as far as tax administration is concerned as it enhances the efforts taken by authorities in curbing tax evasion. It also helps in identifying transporters that are genuine and tax compliant.

Tech enhances tax collection, administration

One of the key factors that have aided in increased GST revenue collection lately and enhanced tax administration is the utilisation of technology and data analytics. On July 1, former Minister of State for Finance and Corporate Affairs, Anurag Thakur said that CBIC had undertaken a drive to crack down on tax evaders. They were able to detect cases of fake tax input credit along with evasion of taxes to the tune of over Rs 29,000 crore. E-invoicing or real-time reporting of B2B transactions in a designated portal was another important measure that was recently introduced to boost tax compliance.