MP sees 0.75% drop in tax collection:437 traders evade ₹400 crore; steel, betel nut, and gutkha top the list

Madhya Pradesh has seen a small fall in GST collection this financial year, down by 0.75%. The main reason is the change in GST slabs introduced by the central government last September, the state government said in the recent budget session of the assembly. State government catches tax evasion by hundreds of traders In reply to a question, the government said that 437 traders were caught evading taxes worth Rs 400.92 crore in 2025-26. So far, Rs 234.49 crore has been deposited. Actions including inspection, search, and seizure were taken under Section 67 of the GST Act. Iron, steel, Betel nut, gutkha traders also involved The government added that 127 cases related to iron, steel, betel nut, and gutkha showed tax evasion of Rs 129.51 crore. Out of this, Rs 46.97 crore has been deposited by the concerned traders and firms. Bhopal ahead of Indore in major tax evasion cases While Indore has been awarded the title of the commercial capital of the state, Bhopal has surpassed Indore in major tax evasion cases. In Bhopal, the total amount in 21 tax evasion cases in this financial year is 12,394 crore, whereas in Indore, 56 such cases were caught, but the total amount of tax evasion is only 10,699 crore. In 140 cases across 32 districts, department officials have so far caught a total of 339 crore in tax evasion, out of which more than 159 crore has been deposited with the department. Major cases of tax evasion exceed 54 crore
According to the department, out of the cases involving steel, betel nut-gutkha where tax evasion of more than 50 lakh was caught, the amount was surrendered in only one. Action was taken against a firm named PS Trader in Katni, after which the firm surrendered an amount of 56 lakh. In the remaining actions taken in Bhopal, Indore, Jabalpur, and Gwalior, no amount was surrendered anywhere. In these tax evasion cases, a total tax evasion of over 54 crore has been revealed. Tax evasion of 4.63 crore in Bhopal, 1.92 crore in Gwalior, 26 crore in Indore, and approximately 10 crore in Jabalpur has come to light. A total of 21 major tax evasion cases have been reported in the steel, betel nut-gutkha sectors. Slab changes made in September
From September 22, 2025, the central government made significant changes to GST, reducing the four slabs to just two. According to the changes, the 12% and 28% slabs were abolished. A new 40% slab was created for luxury and sin goods products. This had an impact on items like automobiles, ACs, and refrigerators. Tax consultant Palash Khurpiya said that product prices did not decrease as much as consumers had hoped. It seems that companies did not pass on the full benefit of the GST reduction to consumers, which prevented consumption from increasing significantly.