By Bl Ahmedabad Bureau
Copyright thehindubusinessline
The Gujarat State Tax Department (SGST) has uncovered tax evasion in the food and restaurant sector, where several establishments across seven cities used multiple QR codes to divert payments to undisclosed bank accounts, suppressed sales by not issuing invoices, and deliberately underreported their actual turnover.
Based on specific complaints and intelligence inputs, state tax officials initially visited several premises discreetly as customers to assess actual business activity and billing processes. Subsequently, the SGST department conducted co-ordinated search operations on September 21–22 across 25 premises linked to 16 taxpayers in Ahmedabad, Vadodara, Surat, Gandhinagar, Bhavnagar, Junagadh, and Rajkot.
Investigations revealed that taxpayers in this sector engaged in fraudulent practices such as use of multiple QR codes to divert payments to undisclosed bank accounts, suppression of sales by not issuing invoices, and wilfully underreporting actual turnover to remain within the ₹1.50 crore ceiling limit to take undue advantage of the GST Composition Scheme for pecuniary gain. These manipulations were clearly intended to conceal actual sales turnover and evade legitimate tax liabilities, stated an official release.
Investigations revealed that taxpayers in this sector engaged in fraudulent practices, such as using multiple QR codes to divert payments to undisclosed bank accounts, suppressing sales by not issuing invoices, and wilfully underreporting actual turnover to stay within the ₹1.50 crore ceiling limit of the GST Composition Scheme for pecuniary gain. These manipulations were intended to conceal actual sales turnover and evade legitimate tax liabilities, according to an official release.
The investigations have so far uncovered unaccounted transactions amounting to ₹52.07 crore, involving tax evasion of about ₹4.88 crore (including interest and penalties). The State Tax Department has initiated recovery proceedings and is pursuing appropriate legal action to safeguard government revenue.
These search operations highlight the Gujarat State Tax Department’s increasing reliance on intelligence-based enforcement and the adoption of innovative methods, including undercover visits, to identify and curb tax evasion, including under the Composition Scheme, the release added.
Published on September 28, 2025
