Rajasthan’s mild on the finish of a dark financial tunnel

In the recent past, the Rajasthan government has launched several important investigations into alleged GST and other tax evasion. This can be seen in tax collection numbers – in a recent report, Rajasthan was second to Odisha in major states and showed improvements in GST surveys after seeing a significant increase in December 2020 compared to December 2019, compared to an 84 percent compliance rate to the national average of 78 percent. The reasons for this increase are the state government’s efforts to counter fake invoices and tax evasion, as well as the timely release of coronavirus restrictions by industry and trade.

The state tax revenue and tax-free revenue also show a constant improvement over the last three months from month to month compared to the previous year. Collections increased from Rs 4,797 crore in October 2019 to Rs 5,797 crore in October 2020; Similarly, from Rs 5.402 billion in November 2019 to Rs. 5,829 billion in November 2020 and from Rs. 5,033 billion in December 2019 to Rs. 6,087 billion in December 2020. In December 2020, the monthly collections were higher than the same for the first time Month in 2019 among all accounting directors – Sales Tax, Sales Tax, GST, State Excise Tax, Stamp and Registration, Road Tax and Mining.

This comes after poor performance in the first six months. In the current fiscal year, the government of Rajasthan posted a budget deficit of Rs 33.109 billion for the first six months, compared to an estimated deficit of Rs 33.922 billion for the full year. The sales deficit was also Rs 27,958 billion for the first six months of the current fiscal year, compared to an estimated deficit of Rs 12,345 billion for the full year. These figures were published by the state government in their mandatory report under the Rajasthan Fiscal Responsibility and Budget Management Act. This confirms the massive blow from the pandemic and the lockdown on the state’s financial health. The economic downturn in the first six months is reflected in the very poor performance of the oil and transportation sectors, as well as the low levels of SGST and excise tax surveys.

This was a major challenge for Prime Minister Ashok Gehlot, who holds the state finance portfolio and will present the budget again this year. He says that since the center is ignoring requests from the state government for financial assistance to deal with the coronavirus crisis, states have no choice but to resort to financial management to balance their budgets. “I’ve done it in the past and I will do it again,” he says with a degree of confidence.

A main reason for the economic jump in the second half of the fiscal year was demand pent up until July, but there are also signs of a recovery. Akhil Arora, chief secretary of finance in the Rajasthan government, said, “Tax numbers have indeed improved. Our financial management and our focus on compliance are helping to reduce the massive adverse effects of the coronavirus. “

On November 24, anti-evasion and other officials from the state’s GST department staged a nationwide campaign against fake invoices and false company registrations escaping tax evasion in Jaipur, Alwar, Ajmer, Jodhpur, Bharatpur, Kota, Nagaur should. and other places. During the investigation, it was found that 13 of the 26 companies existed only on paper created for the purpose of fake invoicing. These firms had sales in excess of 324 crore and used fraudulent pre-tax credits worth over 30 crore. Investigations are currently ongoing to identify the beneficiaries of these fraudulent transactions. To curb the growing threat of fake tax returns, the state government conducted investigations into over 300 companies with total sales of over Rs.172 billion and collected Rs.15 billion.

The focus of the investigations was now on the alleged circumvention through different interpretations of tax norms in the service sector. According to sources, one ongoing investigation concerns the concept of forbearance – in the case of grocery delivery apps that offer significant discounts, the discounts are not part of taxable value – while another concerns issues relating to where one is headquartered Company. Another case concerns the solar industry and the concept of differential taxation, which includes a total liability of around 240 billion rupees. And an investigation into a leading coaching center in Kota increases liability to Rs 54 crore for study materials delivered from the state and for grants given to children.

T. Ravikant, State Secretary for Revenue: “The Covid crisis taught the government to manage its finances like a civil household. We used to take income for granted. Now we are forced to count our money every day. This has led to tighter monitoring, better compliance and a variety of measures such as increased obligations. “

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