Gujarat GST raids have begun at 20 car spa and auto-parts businesses across Ahmedabad, Vadodara, Bharuch and Ankleshwar, with State GST officials examining whether traders underreported sales, used incorrect tax rates or operated without registration.
The inspections follow information gathered by the department about vehicle-washing and service centres operating as car spas while allegedly evading GST. Officials are examining business records and transactions at multiple locations. The department will determine the amount of tax involved only after the document and accounting checks are completed.
According to the report, the investigation covers the way car service centres bill customers for a combination of services and products. During servicing, vehicles may receive brake oil, engine oil, spare parts, seat covers and other accessories. Charges collected for these items and services are required to include GST according to the applicable rules.
The State GST department is examining whether some operators replaced spare parts without properly recording the transactions or issuing accurate bills. One issue under scrutiny is the alleged use of an 18% GST rate on seat covers, even though the report states that a 28% rate applies to them. The tax classification and rate applied to individual transactions will be assessed during the department’s verification process.
Officials are checking bill books, digital devices, vehicle-service data, purchase invoices and sales invoices. They are also conducting cross-verification between purchase and sales records to identify discrepancies between actual turnover and GST payments. This process is intended to establish whether goods purchased by service centres were subsequently sold or installed in vehicles and whether the related tax was collected and deposited.
The department is also examining businesses that may not have held GST registration numbers. The report says some car spa operators and auto-parts traders were found to be under scrutiny on this issue, although the number of businesses ultimately found to be unregistered has not been established.
A further part of the investigation concerns inventory held by service centres. Officials are checking the purchase of spare parts, their sale or use in customer vehicles and the GST charged on those transactions. In some cases, the department suspects that customers may have been charged GST without the corresponding amount being deposited with the government. That claim remains subject to the ongoing examination.
The action follows raids on car-accessories traders last year, indicating that vehicle-service and accessories businesses have remained an enforcement focus for the tax department. However, the present operation covers four urban and industrial centres and involves both service providers and auto-parts sellers.
The department has not yet disclosed the final tax demand, penalties or the number of traders who may face action. Those details are expected only after officials complete the scrutiny of records, digital data, purchase documents and sales transactions.
