Lok Sabha Question No. 1081 (UNSTARRED), answered on 2025-02-10
Subject: Simplification of GST Structure
Ministry: FINANCE
Asked by: Smt. Pratima Mondal

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UN-STARRED QUESTION No. 1081

TO BE ANSWERED ON MONDAY, FEBRUARY 10, 2025/ MAGHA 21, 1946 (SAKA)

## 'SIMPLIFICATION OF GST STRUCTURE'

1081. SMT. PRATIMA MONDAL:

Will the Minister of FINANCE be pleased to state:

- (a) Whether the Government has failed to address the 'unease of doing business' created  by  a  punitive  GST  regime  with  up  to  100  different  tax  rates,  which  has resulted  in  a  staggering  2.01  lakh  crore  in  GST  evasion  and  uncovered  18,000 fraudulent entities, severely impacting MSMEs; and
- (b) The  steps  being  taken  by  the  Government  to  simplify  the  GST  structure  and provide relief to MSMEs struggling with compliance burdens

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

Part (a): No Sir, GST regime has ensured ease of doing business in the country.

- i. GST rates  are  prescribed  on  the  recommendations  of  the  GST  Council  which comprise representatives of Union and State/UT governments. At present, GST structure has 4 main slabs - 5%, 12%, 18% and 28%. Three special rates of 3%, 1.5%  and  0.25%  are  applicable  on  gold,  silver,  diamond  &  Jewellery;  cut  and polished diamonds and rough diamonds respectively. Further, GST Compensation Cess is applicable only on tobacco and tobacco products, aerated drinks and vehicles, etc. at varying rates.
- ii. Two Special drives have been undertaken against fake registrations during May, 2023  to August,  2023  and August,  2024  to  October,  2024  respectively  by  the Central and State GST Authorities. The details of GST evasion cases unearthed during  the  special  drive  are  placed  as  Annexure-I  and  evasion  detected  by Central GST formations during the period 2021-22 to 2024-25 (upto December, 2024) is placed at Annexure-II.

Further, guidelines have been issued regarding 'Ease of Doing Business' while conducting investigations to all field formations under CBIC vide Instruction No. 01/2023-24-GST(Inv.) dated 30.03.2024 which is available on CBIC website.

Part (b):

A Group of Ministers (GoM) on Rate Rationalization has been constituted by the GST Council in its 45th Meeting and one of the Terms of Reference include review of current tax slab rates.

Further, some of the major initiatives / policy measures / reforms undertaken by Government, on the recommendations of the GST Council, with a view to encourage Micro, Small and Medium Enterprises (MSMEs) in the country are as follows:

- (i) No registration is required for Inter-State and Intra-State supply of services upto Rs.20  lakh  in  a  year  (Rs.10  lakh  for  the  states  of  Manipur,  Mizoram,  Nagaland  and Tripura) and for Intra-State supply of goods upto Rs. 40 lakh in a year (Rs. 20 lakh in the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand).
- (ii) Composition scheme has been formulated for small businessmen being supplier of goods and supplier of restaurant services. Under the scheme, person with turnover up to Rs. 1.5 crore (Rs. 75 lakhs in States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand) needs to pay tax equal to 1% (in case  of  supplier  of  goods)  or  5%  (in  case  of  supplier  of  restaurant  services)  on  his turnover  and  needs  to  file  his  returns  annually  with  quarterly  payment  of  tax.  Such taxpayers  do  not  have  to  maintain  elaborate  accounts  and  records  and  instead  of monthly statements and returns, they are required to file quarterly challan and only one return on annual basis.

(iii) Composition  scheme has  also  been  formulated  for  supplier  of  services.  Under the scheme, person with turnover up to Rs. 50 lakh needs to pay tax equal to 6% on his turnover and needs to file his returns annually with quarterly payment of tax.

- (iv)          A  scheme  of  quarterly  return  filing  and  monthly  payment  (QRMP)  has  been introduced where small taxpayers with turnover up to Rs. 5 crore have an option to file returns on quarterly basis, instead of monthly return.
- (v) Filing  of  NIL  GST  monthly  return  in  FORM  GSTR-3B  through  SMS  has  been enabled. Similar facility has been enabled for FORM GSTR-1 and FORM GST CMP-08.
- (vi) Retrospective  amendment  w.e.f.  01.07.2017  has  been  made  in  respect  of Section 16(4) of Central Goods and Services Tax Act, 2017 to increase the time limit to avail  input  tax  credit  in  respect  of  any  invoice  or  debit  note  pertaining to the  financial years 2017-18, 2018-19, 2019-20 and 2020-21, through any GSTR 3B return filed upto 30.11.2021.
- (vii) Section 128A has been inserted in Central Goods and Services Tax Act, 2017, leading to waiver of interest and penalties for demand notices issued under Section 73 of the CGST Act for the fiscal years 2017-18, 2018-19 and 2019-20, in cases where the taxpayer pays the full amount of tax demanded in the notice upto 31.03.2025.

Special Drives against fake registration and fake ITC

1 st  Special Drive (May, 2023 - August, 2023)

|        | No. of GSTINs identified for   | No of Non- existing found   | Action Taken            | Action Taken            | Action Taken                             | Action Taken                                             | Total Amount recovered from GSTINs (Rs. in Cr.)   | No. of       |
|--------|--------------------------------|-----------------------------|-------------------------|-------------------------|------------------------------------------|----------------------------------------------------------|---------------------------------------------------|--------------|
|        | verification                   | GSTINs                      | No. of GSTINs suspended | No. of GSTINs Cancelled | ITC Blocked under Rule 86 A (Rs. in Cr.) | Total Amount of evasion of tax/ITC detected (Rs. in Cr.) |                                                   | Arrests made |
| State  | 48198                          | 11417                       | 6135                    | 6116                    | 6162.71                                  | 9021.16                                                  | 221.82                                            | 0            |
| Centre | 28655                          | 10391                       | 4191                    | 5808                    | 597.42                                   | 15335.91                                                 | 60.17                                             | 8            |
| Total  | 76853                          | 21808                       | 10326                   | 11924                   | 6760.13                                  | 24357.07                                                 | 281.99                                            | 8            |

2 nd  Special Drive (August, 2024 - October, 2024)

|        | No. of GSTINs identified for   | No of Non- existing found   | Action Taken            | Action Taken            | Action Taken                             | Action Taken                                             | Total Amount recovered from GSTINs (Rs. in Cr.)   | No. of       |
|--------|--------------------------------|-----------------------------|-------------------------|-------------------------|------------------------------------------|----------------------------------------------------------|---------------------------------------------------|--------------|
|        | verification                   | GSTINs                      | No. of GSTINs suspended | No. of GSTINs Cancelled | ITC Blocked under Rule 86 A (Rs. in Cr.) | Total Amount of evasion of tax/ITC detected (Rs. in Cr.) |                                                   | Arrests made |
| State  | 45027                          | 40258                       | 8044                    | 4978                    | 1650.25                                  | 6429.30                                                  | 31.15                                             | 0            |
| Centre | 29033                          | 28135                       | 10375                   | 6125                    | 2800.99                                  | 18916.89                                                 | 33.67                                             | 19           |
| Total  | 74060                          | 68393                       | 18419                   | 11103                   | 4451.24                                  | 25346.19                                                 | 64.82                                             | 19           |

## Annexure-I

## Annexure-II

Year wise total GST evasion including ITC frauds detected Pan India for the period 2021-22 to 2024-25 [upto December, 2024] by Central GST Formations

*The GST evasion figures include the figures of ITC fraud cases

| Total Number of GST Offence Cases* Period: April 2021 to December 2024   | Total Number of GST Offence Cases* Period: April 2021 to December 2024   | Total Number of GST Offence Cases* Period: April 2021 to December 2024   | Total Number of GST Offence Cases* Period: April 2021 to December 2024   | Total Number of GST Offence Cases* Period: April 2021 to December 2024   |
|--------------------------------------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------|
| Period                                                                   | No. of Cases                                                             | Detection (In Rs. Cr.)                                                   | Recovery (In Rs. Cr.)                                                    | No. of Arrest                                                            |
| 2021-22                                                                  | 12574                                                                    | 73238                                                                    | 25157                                                                    | 342                                                                      |
| 2022-23                                                                  | 15562                                                                    | 131613                                                                   | 33226                                                                    | 190                                                                      |
| 2023-24                                                                  | 20582                                                                    | 230332                                                                   | 31758                                                                    | 223                                                                      |
| 2024-25 (upto December 24)                                               | 23675                                                                    | 188415                                                                   | 20128                                                                    | 132                                                                      |
| Total                                                                    | 72393                                                                    | 623598                                                                   | 110269                                                                   | 887                                                                      |