HYDERABAD: GST evasion remains highest in Troop Bazaar, where 48% of registered dealers have not filed returns, according to commercial taxes department data.
Begum Bazaar recorded 42% non-filers, followed by General Bazaar at 39% and Kukatpally at 31%.
Officials said wholesale cloth, electronics and hardware businesses account for the highest levels of tax evasion in the city.
AI-Based Monitoring Targets Non-Filers
The commercial taxes department has intensified enforcement through AI-based monitoring systems. These tools identify non-filers in real time and help officials detect suspicious tax patterns.
Officials estimate that each non-compliant dealer evades between ₹10,000 and ₹1.2 lakh in taxes every month.
The department has launched investigations into suspicious return filers. It is also taking action against traders who have stopped filing returns.
Recovery Drives Yield Results
Over the past six months, officials scrutinised e-way bills and bank transactions. They issued notices to 8,200 non-filers during this period.
A special drive conducted in May helped the department recover tax arrears worth ₹124 crore.
Officials also cancelled 22,400 GST registrations of dealers who failed to file returns for six consecutive months. They warned that traders generating or using bogus bills could face criminal prosecution and imprisonment.
Fake Invoices and Fraudulent ITC Claims
Commercial taxes officials said AI tools are helping them identify tax evasion patterns more effectively.
Several traders in Begum Bazaar and Sultan Bazar allegedly generated fake invoices to claim fraudulent Input Tax Credit (ITC). Many later stopped filing GST returns after fearing investigations and enforcement action.
Small Traders Face GST Compliance Challenges
In Kukatpally and LB Nagar, officials linked delayed filings to difficulties in adapting to the GST 2.0 framework.
Many small traders struggle with the Invoice Management System (IMS) and GSTR-2B reconciliation process. These issues have contributed to non-compliance.
Turnover Suppression Detected
Officials also detected large-scale turnover suppression in commercial hubs such as Charminar and Lad Bazaar.
Several traders conducting business worth more than ₹40 lakh annually reportedly declared turnover below ₹20 lakh. Some filed nil returns, while others did not file returns at all to avoid tax liability.
Lack of Awareness Among New Businesses
A departmental survey found that nearly 30% of new business owners do not understand the difference between GSTR-1 and GSTR-3B returns. This lack of awareness has led to procedural lapses and non-compliance.
Officials said they will further intensify enforcement measures, AI monitoring and recovery drives to curb revenue leakage and improve GST compliance across