Troop Bazaar tops in GST evasion in Hyderabad

Hyderabad: GST evasion is most prevalent in Troop Bazaar, where 48 per cent of registered dealers are not filing returns. Begum Bazaar follows with 42 per cent non-filers, while General Bazaar records 39 per cent and Kukatpally 31 per cent, data from the commercial taxes department shows. Official sources said the highest levels of tax evasion in Hyderabad were detected in wholesale cloth, electronics and hardware businesses.

The data shows that one in every three GST-registered dealers in Hyderabad is not filing returns, resulting in a significant loss of revenue to the government. The department estimates monthly losses of nearly `150 crore and annual losses touching `1,800 crore to the state exchequer. The data revealed that out of 4.28 lakh GST dealers registered in the city, only 2.78 lakh are filing returns regularly, while the remaining 1.5 lakh dealers, accounting for 35 per cent of the total, have failed to comply with return-filing requirements.

The commercial taxes department has intensified its crackdown on tax evaders by using artificial intelligence tools to identify non-filers in real time. Officials estimate that each non-compliant dealer is evading taxes ranging from `10,000 to `1.2 lakh every month. Investigations have been launched into suspicious return filers, while action is being taken against dealers who have stopped filing returns altogether.

In the last six months, officials scrutinised e-way bills and bank transactions and issued notices to 8,200 non-filers. During a special drive conducted in May, the department collected tax arrears worth `124 crore. Officials have already cancelled 22,400 GST registrations of dealers who failed to file returns for six consecutive months. Officials warned that traders found generating or using bogus bills would face criminal prosecution, including imprisonment.

Official sources said AI-based monitoring systems were helping the department identify tax evasion patterns and non-filers more effectively. The department has also found several reasons behind the growing number of return defaulters across the city.

Officials said some traders in Begum Bazaar and Sultan Bazar had generated fake invoices to claim fraudulent Input Tax Credit (ITC). Fearing investigation and possible action, many of them subsequently stopped filing GST returns. In Kukatpally and LB Nagar, small traders have been struggling with the newly introduced GST 2.0 compliance framework, particularly issues related to the Invoice Management System (IMS) and GSTR-2B reconciliation, resulting in delayed or non-filing of returns.

The department has also detected widespread suppression of turnover in business hubs such as Charminar and Lad Bazaar. Despite conducting business worth more than Rs 40 lakh annually, several traders were found to be showing turnover below Rs 20 lakh, filing nil returns or not filing returns at all to avoid tax liability.

Lack of awareness has emerged as another major factor contributing to non-compliance. An official survey conducted by the department revealed that nearly 30 per cent of new entrants into business were unaware of the difference between GSTR-1 and GSTR-3B returns, leading to procedural lapses and non-filing.

With GST non-compliance rising steadily, the commercial taxes department has indicated that enforcement measures, AI-based monitoring and recovery drives will be further intensified to curb revenue leakage and improve tax compliance across Hyderabad.