GST Evasion Scandal Scheme Unearthed
Sprouts Special Investigation Team, Led by Unmesh Gujarathi, Exposes Tax Fraud
Unmesh Gujarathi
Sprouts News Exclusive
The Sprouts Special Investigation Team (SIT), under the leadership of investigative journalist Unmesh Gujarathi, has unveiled a significant GST evasion scheme involving cooperative housing societies established by the Hiranandani Group. The scam, centered in the high-end Hiranandani Gardens locality in Powai, Mumbai, reveals deliberate manipulation to avoid paying Goods and Services Tax (GST).
Modus Operandi of the Scam
The investigation, supported by intelligence from Anti-Evasion, CGST, and C. Ex. Navi Mumbai, uncovered the following tactics employed to evade GST obligations:
1. GST Applicability Ignored
* Under Section 22(1) of the CGST Act, 2017, cooperative housing societies with an aggregate turnover exceeding ₹20 lakh annually must register under GST. This turnover includes maintenance charges, receipts from advertisements, mobile towers, parking fees, sinking funds, cultural charges, and other income.
2. Threshold Limits for Monthly Collections
* Societies must charge GST (CGST + SGST) on monthly maintenance if it exceeds ₹5,000 per member (up to January 24, 2018) and ₹7,500 per member (from January 25, 2018).
3. Splitting Maintenance Bills
* M/s Torino CHS Limited, located in Hiranandani Gardens, was found to split maintenance bills for single-dwelling units into multiple entries to keep collections below the ₹7,500 threshold. However, evidence, including gas and electricity meter connections and approved building plans, confirmed the existence of single-dwelling units.
4. Failure to Register and Pay GST
* Despite collecting taxable maintenance exceeding the prescribed limits and an annual turnover over ₹20 lakh, the society failed to register under GST, collect taxes, or deposit them into the government treasury.
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Financial Recoveries
The SIT investigation led to the recovery of ₹66,82,254, comprising:
* Tax Dues (CGST + SGST): ₹39,00,558
* Interest: ₹21,96,612
* Penalty: ₹5,85,084
Ongoing Investigations
Further investigations are underway against other cooperative housing societies in Hiranandani Gardens, with evidence suggesting similar tax evasion practices since the inception of the CGST Act in 2017.
Impact on Government Revenue
The uncovered scheme highlights a loophole that has deprived the government of substantial revenue. Authorities have been alerted to tighten compliance measures and prevent similar frauds.
SIT’s Call to Action
Unmesh Gujarathi and the Sprouts SIT urge cooperative housing societies and their members to adhere to GST regulations, ensuring transparency and compliance to avoid legal repercussions.
This investigation serves as a critical reminder of the need for vigilance and stringent enforcement of tax laws to safeguard public revenue.
Unmesh Gujarathi
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