Can an Association Earning in Crores be exempted from GST?
Port Blair, June 8: In what can be said as a glaring example of ‘Tax evasion’, the Havelock Tourist Boat Operator’s Association, which has around 100 tourist boats and earn revenue in crores of Rupees during the season, is said to have been unknowingly exempted from paying GST. The allegation is that the association has not been paying the GST to the government, which is a mandatory factor if a business revenue crosses the slab of GST.
Havelock (Swaraj Dweep) is the most sought after tourist destinations in Andaman & Nicobar Islands. Every tourist who arrives at Port Blair plans a visits to Swaraj Dweep for a minimum of two nights and three days. With more than seven private cruise liners operating from Havelock with a capacity of approximately 250 passengers and a minimum of two trips a day, the number of tourist foot fall in this Island is estimated to be around 3500 per day.
Out of these 3500 tourists, a majority prefer to visit the Elephenta Beach for water sports activities. These tourists are transported in the boats that function under the ‘Havelock Tourist Boat Operator’s Association’. A rough estimate shows that the total collection per day by the Association would come to around Rs. 20,00,000/- @18% GST Rs. 3,60,000/- per day and a six-month business during season would work out to around Rs. 6.48 Crores.
The season time is considered to be September to February. In the remaining six months, even a 25% of the business would mean an income of Rs. 162 lakhs. If this calculation is justified, the total revenue loss to the government would estimate to around Rs. 8.10 Crores per year.
The GST started in July 2017. Five years have passed since then and the allegation is that the Association which sells the tickets, till date hasn’t paid any GST. The COVID-19 pandemic had affected the economy of the entire nation. Considering the testing times, even if one sets aside the three years of pandemic, it is alleged that the Association should be due by Rs. 16 crores.
The above calculation is just a rough estimate to bring to the knowledge of the authorities to have the issue examined. If the allegation is found right, an immediate action is warranted as tax evasion is a major crime and cannot be let go off.
In the case of Havelock Tourist Boat Operator’s Association, it becomes the duty of person selling tickets to pay GST to the Government and if they do not pay, the authorities have power to recover from them retrospectively.