Kerala’s State Goods and Services Tax (SGST) department stands vindicated on the utility of its six-day residential training programme being held for 300 officials at the Kakkanad-based Rajagiri School of Engineering and Technology thanks to the day-long Statewide raid, Operation Palm Tree, targeting scrap trade in which tax evasion to the tune of ₹209 crore was detected on May 23.
The administrative sanction of ₹46.65 lakh for the training programme at a time when the Kerala government was facing a financial crisis was dubbed as profligate by certain quarters.
However, it is now being pointed out that it was money well spent, with the officials putting the lessons to good use and recovering manifold the expenses incurred on the training programme.
The training will conclude on May 25 (Saturday).
The training was necessitated since enforcement officials had not received any drilling since the new GST regime kicked in and the department was restructured. The venue for the programme was chosen for strategic and logistical reasons, including availability of computers and lab facilities, and it also had to accommodate 300 persons, said sources while countering criticism that it could have been held in some government facility at much lesser cost.
Modus operandi unearthed
Operation Palm Tree targeting scrap trade held midway through the training was the culmination of months-long work. It unearthed a modus operandi of registering fictitious companies in the name of unsuspecting migrant workers and the impoverished without their knowledge and showing transactions against those companies to gain unlawful input tax credit benefits. The fraudulent practice was found more in Palakkad on account of the dominant scrap trade industry in the district.
“Depending on the extend of the fraud and the gravity of the offence, the department will proceed with arrests and prosecution after despatching notices to all guilty parties. That assessment was still under way since the operation lasted late on Thursday (May 23) night,” said department sources.
Tax evasion in excess of ₹5 crore is treated as a cognisable and non-bailable offence, while evasions falling beneath that threshold entail refunding the evaded tax in addition to a penalty.
Steps such as cancellation of GST registration and freezing of bank accounts will be adopted immediately while estimating the tax defaulted, penalty to be imposed, arrest and prosecution may take more time.
