Non-compliance in GST payments may be burning a Rs 5 lakh crore hole in revenues, says report

The government may be losing Rs 5 lakh crore in indirect tax revenue a year, amounting to 40 percent of its goods and services tax (GST) collection target, due to defaults and evasion, according to a report by Hindustan Times. 

According to the report, which cites the Fifteenth Finance Commission’s (FFC), policymakers fear that businesses are not paying their fair share of taxes.

FFC made a presentation to the GST Council recently and assessed that the revenue loss was equivalent to 2.4 percent of gross domestic product, the HT report said. This works out to Rs 5 lakh crore if one goes by the first advance estimate of nominal GDP for FY20 released earlier this month, it said.