In a major crackdown led by the Directorate General of GST Intelligence (DGGI) has found agencies selling premium automobile brands like BMW and Jaguar’s cars, and motorcycles like Kawasaki and Harley Davidson charging Goods and Services Tax (GST) from the buyers but not paying it to the government. The raid has recovered unpaid GST of worth ₹25.04 Crore from five such agencies in the city of Nagpur who deal with luxury vehicles along with interest of ₹28.47 lakh.
Five dealers were caught during the DGGI raid including Anand Techno Marketing, the Jaguar dealer, from which the largest amount of ₹15.44 Crore was recovered. Another dealer Anand Mine Tools that sells Jaguar Cars was found stashing ₹6.91 Crore and from Mandhan Motors which deals in BMW cars ₹2.34 Crore was recovered. From Star Bikes which deals in Kawasaki bikes and Legend Bikes which deals in Harley Davidson motorcycles ₹27.74 lakh and ₹5.77 lakh were recovered respectively.
An official statement released from the department on Wednesday said that an investigation by the tax authorities found that these dealers were collecting the mandatory GST from the consumers but have not credited it to the government. As the prices of these luxury vehicles go up to over a crore, the GST component also makes up a substantial amount. It was found that the agencies had not deposited the tax for as long as four months to a year, in some cases.
On these products, GST is charged at 28% along with a hefty cess. GST is added to the sale price of a commodity which needs to be passed on the government within a month of recovery from the buyer; after that, the interest is charged. If an amount of ₹5 Crore and above is not deposited for a period of three months or more, it amounts to prosecution, unless the tax liability is cleared right away with interest.
The investigations against these dealers based on the intelligence received from customers that the agencies were not depositing the tax collected from buyers. During the interrogation, the dealers admitted that they did not deposit the taxes collected from the customers, the official statement added.