Lok Sabha Question No. 2117 (UNSTARRED), answered on 2019-12-02
Subject: Tax Evasion/Economic Growth
Ministry: FINANCE
Asked by: Ranjanben Dhananjay Bhatt, Sangeeta Kumari Singh Deo, Raja Amareshwara Naik, Bhola Singh, Sukanta Majumdar

(a) & (b):

Several cases of Tax evasion relating to indirect taxes as detailed below have come to light from different parts of Country:

(Rs. in

## crore)

| Year                     |   Number of Cases |   Tax evasion detected |   Amount recovered |
|--------------------------|-------------------|------------------------|--------------------|
| 2017-18                  |              6815 |                32204.5 |            4579.94 |
| 2018-19                  |              9348 |                65843.4 |           21221.5  |
| 2019-20 (uptp September) |              3074 |                24657.5 |            5238.22 |

The details of the cases of the commercial fraud cases booked by Anti-smuggling unit during 2018-19 are as under:

(Rs. in crore)

|   Number of Cases |   Amount of Duty Involved |   Amount of Duty recovered |
|-------------------|---------------------------|----------------------------|
|              2966 |                     11211 |                    5643.96 |

## Government of India Ministry of Finance

## Department of Revenue LOK SABHA

## UNSTARRED QUESTION NO. 2117

TO BE ANSWERED ON MONDAY, DECEMBER 02, 2019 AGRAHAYANA 11, 1941 (SAKA)

## TAX EVASION/ECONOMIC GROWTH

†2117. SHRIMATI RANJANBEN DHANANJAY BHATT:

SHRIMATI SANGEETA KUMARI SINGH DEO: SHRI RAJA AMARESHWARA NAIK: SHRI BHOLA SIGH: DR. SUKANTA MAJUMDAR:

Will the Minister of Finance be pleased to state:

- (a)  whether  several  cases  of  tax  evasion  have  come  to  light  from  different  parts  of  the country, if so, whether the Government is considering to take any steps in this regard;
- (b)  if  so,  the  time  by  which  these  steps  will  be  taken  by  the  Government  and  if  not,  the reasons therefor;
- (c) whether the Government has taken initiatives to increase the number of individuals under IT net;
- (d) if so, whether recent positive steps started by the Government to have positive impact on the situation and if so, the details thereof;
- (e)  whether  the  Government has set targets for India's  economic growth for the next five years;
- (f) if so, whether there have been some sectors identified by the Government as Sunrise or Growth Engines in this regard and if so, the details thereof; and
- (g) the steps being taken by the Government to reduce the inflation due to short supply of essential commodities because of natural calamities?

## ANSWER MINSTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

During  FY  2018-19  and  2019-20  following  number  of  non-filers  with  potential  tax liabilities were identified by the income tax department:

| NMS Cycle 7 (AY 2017-18)   | 38.81 lakh   |
|----------------------------|--------------|
| NMS Cycle 8 (AY 2018-19)   | 15.58 lakh   |

Income Tax Department takes suitable steps on a continuous basis against the persons indulging  in  tax  evasion  throughout  the  country.  Such  steps/actions  under  the  direct  tax  laws include, inter-alia ,  conducting search and seizure actions, surveys, summons, assessment and reassessment of income, levy of penalties and filing of prosecution complaints before criminal courts, wherever applicable.

Income Tax Department has also implemented the Non- Filers Monitoring System (NMS) which assimilates and analyses in-house information as well as transactional data received from third- parties, including Statements of Financial Transaction, Tax Deduction at Source and Tax Collection at Source statements, Intelligence and Criminal Investigation data etc.to identify such persons who have undertaken high value financial transactions but  have  not  filed  income  tax returns.

The border control agencies, field formation of Central Board of Indirect Taxes & Customs BIC  keep  constant  vigil  on  the  illicit  imports/smuggling  through  ports,  airports,  land  Customs Stations, inland Container Deports, Foreign Post Offices and Courier Terminals. Each Customs Commissionerate  is  having  intelligence  and  investigation  units  for  checking  of  smuggling. Besides,  the  Directorate  General  of  Revenue  Intelligence  having  pan  Indian  presence  is  the specialized agency under CBIC involved in anti-smuggling and anti-evasion activities. Alerts and modus operandi circulars are issued from time to time to prevent smuggling of such goods. On detection  of  cases,  strict  action  is  taken  accordance  with  the  Customs  Act,  1962  and  other existing provisions of laws, as applicable.

The  footprints  of  Directorate  General  of  GST  Intelligence  have  been  expanded  in  GST Regime. The monitoring tools to prevent GST evasion has been strengthened & emphasis has been laid on system based analytical tools and system generated intelligence. In this direction, the Directorate General of Analytics and Risk management (DGARM) has been set up by the CBIC and the same has become operational w.e.f. 1 st July  2017. E-way bill squads have also been activated for the purposes of random verification of the goods in transit.

(c)  &  (d):    Various  measures  are  being  taken  by  the  Government  to  increase  the  number  of income tax return filers including identification of potential non-filers through centralized Non-filer Monitoring System (NMS), formulation of region-specific strategies for identifying potential nonfilers,  issue  of  statutory  notices  to  enforce  compliance,  holding  of  outreach  programmes  to encourage  voluntary  compliance,  use  of  mass  media  for  creating  awareness,  simplification  in income-tax returns and filing process to encourage voluntary filing, etc.

During F.Y. 2018-19, about 1.1 crore new income tax return filers were added. During the current financial year, so far, 61.86 lakh new return filers have already been added.

(e) & (f):     It is the Government's endeavor to continuously increase GDP growth rate year after year. To this end, the government has been taking various reforms measures to boost economic growth in the medium to long term prospects. Introduction of Insolvency and Bankruptcy Code (IBC) in 2016 is a significant step towards cleaning and strengthening the financial system of the country. Implementation of Goods and Services Tax in 2017 stands out as the most important measure for  improving  ease  of  doing  business  in  the  country.  Make-in-India  programme  is  a major initiative towards increasing the indigenous capacity of the country to produce world class goods and services. Continuous liberalization has resulted in record and unprecedented inflows of  foreign  direct  investment  into  the  country,  and  all  along  government  has  kept  inflation  low, fiscal  spending  disciplined  and  current  account  deficit  manageable  to  ensure  macroeconomic stability  so  necessary  to  sustaining  a  healthy  investment  climate  in  the country.  More  recently government has cut corporate tax rate from 30 percent to 22 percent to boost investment activity in the country. In particular, the corporate tax rate has been cut to 15 percent for new domestic manufacturing companies which is amongst the lowest in the world. This complements a cut in the repo rate by 135 basis points during 2019 by the Reserve Bank of India and mandating of banks  to  link  their  lending  rates  with  external  benchmarks  for  reducing  the  cost  of  capital  for investors. Government has also extended PM Kisan scheme to include all farmers, which will boost rural consumption.

(g) Steps taken by the government to contain price rise are as per Annexure.

## Steps taken by the Government to contain price rise

i. During  the  current  year,  buffer  stock  of  57,372.90  MT  onion  was  created  under  Price Stabilization  Fund  (PSF)  through  procurement  from  Maharashtra  (48,183.54  MT)  and  Gujarat (9,189.36 MT). Of this, after adjusting for storage losses, moisture, driage, spoilage and low quality onion disposed of in the local market, a total quantity of 26,735 MT (46.59% of procurement) was distributed to various States Governments, other agencies and also sold in various mandi through open  auction.  In  addition,  about  11,408  MT  of  low  grade  onion  were  sold  /disposed  in  the  local market.

ii. Onions were supplied to State Governments of Haryana, Kerala, Andhra Pradesh and Uttar Pradesh  at  no-profit  no-loss  basis  to  improve  prices  and  availability  situation.  Since  July  2019, onions were supplied from the buffer stock for direct retailing in Delhi-NCR through Mother Dairy, NCCF, NAFED and Govt. of NCT of Delhi at regulated retail rates to ensure availability of onions at reasonable prices. Since last one week freshly procured onion from Alwar area is being supplied to Govt. of NCT of Delhi.

iii. Onions were supplied to State Governments of Haryana, Kerala, Andhra Pradesh and Uttar Pradesh  at  no-profit  no-loss  basis  to  improve  prices  and  availability  situation.  Since  July  2019, onions were supplied from the buffer stock for direct retailing in Delhi-NCR through Mother Dairy, NCCF, NAFED and Govt. of NCT of Delhi at regulated retail rates to ensure availability of onions at reasonable prices.

iv. The benefit to exporters of onions under Merchandise Exports from India Scheme (MEIS) was withdrawn  through  notification  dated  11.06.2019.  Minimum  Export  Price  (MEP)  of  $850/MT  was imposed on 13.09.2019.

v. Onions were supplied to State Governments of Haryana, Kerala, Andhra Pradesh and Uttar Pradesh  at  no-profit  no-loss  basis  to  improve  prices  and  availability  situation.  Since  July  2019, onions were supplied from the buffer stock for direct retailing in Delhi-NCR through Mother Dairy, NCCF, NAFED and Govt. of NCT of Delhi at regulated retail rates to ensure availability of onions at reasonable prices. Since last one week freshly procured onion from Alwar area is being supplied to Govt. of NCT of Delhi.

vi. Government, on 29 September 2019, imposed stock limits on traders across the country - 100 quintals on retail traders and 500 quintals on wholesale traders under the Essential Commodities Act, 1955/States are free to introduce lower limits. Further, Government of India has urged State Governments  to  hold  regular  meetings  with  the  traders  of  Onions  at  State  and  District  level  to prevent  hoarding,  speculative  trading  and  profiteering,  unfair  and  illegal  trade  practices  like cartelling, etc. On 29 September, 2019, export of onions was banned.

vii. Government has on 9 November, 2019, directed MMTC to import up to 1 Lakh MT of onion and NAFED to procure surplus onion from Rajasthan, Maharashtra and distribute in deficit States.

viii. Government has approved creation of a dynamic buffer of up to 20 lakh tonnes of pulses for appropriate market intervention under Price Stabilisation Fund (PSF).

ix. Pulses from the buffer is utilized for meeting institutional requirements like supplies for MDM, ICDS, PDS, Army & CPMFs.  Food Aid has also been provided to Afghanistan as well as for Flood- relief  measures  in  Kerala.  The  stock  is  also  utilized  for  releases  in  open  market  to  effectively manage/moderate the prices of pulses.

- x. Currently available balance of buffer stock of pulses under PSF left is about 15.67 LMT.