MM TAX CLUB

The Directorate General of Goods and Services Tax Intelligence (DGGI) is conducting an investigation into a suspected tax evasion totaling approximately ₹850 crore for the fiscal years 2020-21 and 2021-22 by major commercial tutoring institutions. Officials report that the inquiry, which started in January 2023, is focused on uncovering discrepancies in student enrollment figures and the failure to remit collected taxes to the government.

Officials are examining the financial activities of numerous large and medium-sized tutoring centers throughout India. They have identified over 145 such institutions involved in a wide array of academic disciplines, including preparation for medical and engineering entrance exams as well as language and aptitude tests like IELTS and GRE, which are under investigation for tax evasion.

The centers under scrutiny are located in various Indian cities, including notable education hubs like Delhi, Mumbai, Kota, Kolkata, Chandigarh, Chennai, Coimbatore, and several tier-2 cities. While specific names of the centers have not been disclosed due to the ongoing nature of the probe, there have been arrests linked to these investigations.

These tutoring centers reportedly charged an 18% Goods and Services Tax (GST) on their fees but either failed to deposit this amount with the treasury or falsely claimed these services as exempt from tax. Some centers offered discounts equivalent to the GST charged, omitting such transactions from their tax returns, in direct contravention of the CGST Act, 2017, specifically Section 132(1)(d). The investigation has also unearthed discrepancies between the reported earnings and actual earnings among these institutions. The DGGI has instructed its zonal offices to identify and list any coaching centers that have not registered for GST.