Suits, saree dealers under GST dept lens

NEW DELHI: As the wedding season approaches, Central GST authorities have intensified their crackdown on lehenga, suits and saree dealers in Delhi’s iconic Chandni Chowk market. The dealers are under investigation for alleged GST evasion and other malpractices.

Sources in the GST department claim many of these businesses conduct cash transactions during the year, which is at its peak in the high-demand wedding season, enabling them to evade GST on their outward supplies.

Furthermore, it has been alleged that these dealers use fake invoices to claim input tax credits for transactions made through formal banking channels. The investigation has uncovered two primary methods of tax evasion -- evasion of GST on outward supplies and fraudulent availing of input tax credit.

As per sources, many dealers accept cash payments for their goods but fail to report these transactions to evade GST liability. This practice is particularly rampant during the wedding season when sales volumes surge.

For transactions made via cheques or other traceable payment modes, the dealers allegedly use fake invoices to claim input tax credits, reducing their overall GST liability.

These practices not only result in significant revenue losses for the government but also create an uneven playing field for compliant businesses. GST authorities have been conducting search operations at many such businesses in last one month.

Beyond tax evasion, the investigation has revealed troubling issues related to property disputes in Chandni Chowk and nearby areas such as Pusa Road. Several dealers, occupying rented premises, have allegedly refused to vacate the properties despite receiving legal eviction notices.

These tenants are reported to pay a meager rent of as low as Rs 100 per month for properties valued in crores from where they do not even conduct businesses. Landlords have raised concerns about these dealers using intimidation tactics to retain possession of these shops.

Source : https://www.newindianexpress.com/business/2024/Nov/20/suits-saree-dealers-under-gst-dept-lens