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No GST returns, no E-way bills! Centre to crack down on non-filers

No GST returns, no E-way bills! Centre to crack down on non-filers

Concerned with the dipping monthly collections of Goods and Services Tax (GST), the government and indirect tax department are now planning stricter measures against non-compliant taxpayers.

According to sources, the tax department is now planning to block the facility to generate e-way bill for taxpayers who do not file two consecutive GSTR-3B returns with effect from 17 November 2019. Once the taxpayer has filed one of the pending returns, the facility to generate e-way bill will be automatically restored.

GSTR-3B is monthly return that every registered GST payer has to file. It contains details of sales and purchases made by a business.

Sources told Business Today that the required connectivity between GST Network (GSTN) and the e-way bill system and development of an application to block and unblock facility has been developed and tested between two systems.

While a decision to this effect was taken by the GST Council in April, the reason for the ‘extreme’ step could be to check leakages of taxes. Non-filing of returns is still high and the tax department thinks this is a major cause for falling GST collections.

“With a continuous dip in revenue for the last few months, this is a step towards curtailment of tax leakage. Businesses need to ensure disciplined filing of GSTR-3B to avoid business disruption,” says Anita Rastogi, partner, indirect taxes, PwC.

According to the indirect tax department, as of 8 November 2019, 21.99 lakh taxpayers have been found to have not filed GSTR-3B returns of August and September 2019.

These defaulters now face possible blocking of the facility to generate e-way bill from 17 November. The department, however, is planning to send alert messages to such taxpayers if they come to e-way bill website, and ask them to file their returns by the 17 November.

The problem though is that integration testing of backend applications of few states with GST System is not yet completed. Unless the facility to unblock the e-way generation facility is developed, the department cannot go ahead with blocking the facility.

Rajat Mohan, a partner in chartered accountancy firm AMRG & Associates, said that deferment of implementation of tax provisions on the premise that technology is not ready indicates that the tax authorities are still not ready to identify and capture the culprits (evading tax) on a real-time basis.

In September 2019, the GST collection fell by 5.3% to Rs 95,450 crore as compared to a year-ago period. In August, the GST collections fell to Rs 92,000 crore, which was lower than the previous year collection by over 4%. With the average monthly collections so far this year at around Rs 98,000 crore, way below the required Rs 1.20 lakh crore, the government is looking at a large shortfall in GST collection.

With five more months to go in this financial year, the latest move is probably a last-ditch attempt by the government to revive GST collections.

Source: Business-Today.

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GST: Evasion, returns and revenue boosting measures to feature at officers’ meet Monday

GST: Evasion, returns and revenue boosting measures to feature at officers’ meet Monday

Tax officers from the states and the Centre will get together for a day-long meeting on Monday to discuss administrative, legal, revenue and implementation-related issues under the indirect tax regime.

This will mark a first of its kind interaction between central and state tax officers, delinked from the agenda of the Goods and Services Tax (GST) Council meeting. Usually, officer-level meetings have always taken place a day before the GST Council meetings, mainly to discuss measures outlined in the Council’s meeting agenda.

As slowing revenues under the GST have become a concern, officials from the states and the Centre will discuss measures for anti-evasion, revenue augmentation, compliance, returns filing and online system, officials said. The rates of goods and services will, however, not be discussed since those pertain to the GST Council, they said.

Officials said this meeting would be more broad-based, wherein states and the Centre would have a common platform to discuss measures to streamline and regularise many pending issues under the GST. The tax officials are expected to take up issues related to e-way bills, delay in filing returns, IT matters, pending legislative changes, and methods to ensure greater coordination between states and Centre under GST, they said.

“This method to have a common platform for discussion between states and Centre is being tried for the first time. The idea was not to club it with a GST Council meeting and have an open agenda meeting. This was felt necessary so as to develop a mechanism for similar discussions going ahead. The officer-level meetings before Council meetings, otherwise, have too many agenda items and not everything gets discussed in detail,” one of the officials said.

Apart from the administrative- and implementation-related issues, pending legal changes would also be discussed. Another official said many states have not followed up on the amendments in the Central GST (CGST) Act with changes in their respective State GST (SGST) Acts, so much so that in some places there is a time lag of six months. “Such issues need to be prioritised since they are creating a hurdle in proper implementation of GST and would be raised in the meeting,” the official said.

The plan to hold this meeting comes even though the Council last month constituted a committee of officials from states and the Centre for revenue augmentation and looking into wider range of reforms such as systemic changes in the GST, including checks and balances to prevent misuse, measures to improve voluntary compliance, improved compliance monitoring and anti-evasion measures. The committee, which was earlier supposed to submit its report within 15 days, has so far met only once and is now likely to be given an extension of 1-2 months, officials said.”The committee has a wide range of topics in its terms of reference, so it would take time,” an official said.

GST collections in October contracted by 5.29 per cent to Rs 95,380 crore from Rs 1,00,710 crore in the year-ago month, marking the third instance of a contraction since the July 2017 roll-out of the indirect tax regime.

Source: indian-Express

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GST collections remain subdued at Rs 95,380 crore in October

GST collections remain subdued at Rs 95,380 crore in October

The Goods and Services Tax (GST) collection in October declined to Rs 95,380 crore, as against Rs 1,00,710 crore in the same month a year ago, as per government data released on Friday.

This is the third consecutive month when GST mop-up remained below the Rs 1 lakh crore mark, despite October being a festive month.

The revenue collection in September stood at Rs 91,916 crore.

“The gross GST revenue collected in the month of October, 2019 is Rs 95,380 crore of which CGST is Rs 17,582 crore, SGST is Rs 23,674 crore, IGST is Rs 46,517 crore (including Rs 21,446 crore collected on imports) and Cess is Rs 7,607 crore (including Rs 774 crore collected on imports),” the finance ministry said in a statement.

It further said the total number of GSTR 3B returns (summary of self-assessed return) filed for the month of September (up to October 30) was 73.83 lakh.

Source: Times-Of-India.

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e-invoicing under GST may be made mandatory in future, says GSTN CEO Prakash Kumar

e-invoicing under GST may be made mandatory in future, says GSTN CEO Prakash Kumar

GSTN CEO Prakash Kumar on Thursday said that e-invoicing under GST will remain on a voluntary basis initially, however, it could be made mandatory in future if the council feels the need of doing so.

“The council has given us the date of January 1st to deploy it on voluntary basis; the way we have done for e-way bill — it will be on a voluntary basis for some time and after that, it will be made mandatory whenever the council thinks of,” said Kumar in an interview with CNBC-TV18.

The goods and services tax (GST) collection has remained subdued in October as well. GST mop-up, according to sources, stands at Rs 93,000 crore, significantly lower than Rs 1 lakh crore in October 2018.

“The applications which were filed were around 3.5 crore and 1,500 have already been issued; the sanctions and refund have already taken place,” said Kumar.

“If there is deficiency, it is returned back and the taxpayer is supposed to add those papers and that is treated as a fresh application,” added Kumar.

On simplification front, Kumar said, “The most important one is the new return which will be launched on April 1. In fact, we have already launched the offline tool which is available also in the online version which people have already started using.”

“The advantage is that once they use it, they will be familiar with the new system which is different from what we have today,” added Kumar.

He further said that automation will help bring the burden down.

Source: CNBCTV 18

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Government orders biggest review of GST since its launch

Government orders biggest review of GST since its launch

Two years after its launch, the government has begun the biggest review of GST – including a possible resetting of rates along with a scrutiny of the slabs-to tone up collections and plug leakages.

The task has been assigned to a 12-member committee of state and central government officials to “augment GST collection and administration”, set up a day before the PMO leads consultations with state chief secretaries on Friday, where it is expected to urge them to push for improved collections.

The terms of reference indicate the panel should suggest systemic changes to prevent misuse, improve voluntary compliance, boost overall compliance monitoring and suggest anti-evasion measures. With inverted duty structure proving to be a source of leakage in sectors like restaurants, sources told TOI that the rates may be reviewed.

The GST review committee can co-opt other state government representatives to look at fitting some of the products in other slabs.

There are several sectors where the problem persists. In case of restaurants, for instance, the withdrawal of tax credit on payment for goods and services such as rent has prompted many players to rework the lease agreement in a way that tax payment is avoided and the rent is lowered.

GST collections have slowed down in recent months and have grown at a shade under 5% during the first half of the current financial year, against the target of 13%. While a part of the slowdown is attributed to the state of the economy, especially the sharp fall in auto sales and floods, officials are also worried over weak enforcement in the states, who have been assured compensation by the Centre in case collections grow at under 14% during the year.

In recent weeks, Opposition-ruled states have attacked the Centre on GST collections and said that tax collections have been hit due to a faulty design and not necessarily due to a slowdown. They have blamed the tax cuts for lower collections, a charge that has been rubbished by the Centre, which has said that states were party to all the “unanimous decisions” taken by the GST Council.

At last month’s meeting of the GST Council, Finance Commission chairman NK Singh had flagged the need to review the slabs, which currently stand at 5%, 12%, 18% and 28%. When GST was launched in July 2017, the idea was to merge the 12% and 18% slabs and reduce the number of items in the top bracket. While there are fewer items facing 28% levy than two years ago, officials have said that given the poor revenue realisation the revenue-neutral rate will be 16-17% if the 12% and 18% brackets are merged, which may be politically difficult since there will be a larger number of items where the tax burden will go up.

States have petitioned the Finance Commission to increase the compensation period by another three years, which many believe makes the system leaky as states are assured of revenue. For instance, often states are accused of not following up on leads that are generated every month through a system of data analytics.

Source: Times-Of-India

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GST might have flaws but cannot damn it now: Finance Minister Nirmala Sitharaman

GST might have flaws but cannot damn it now: Finance Minister Nirmala Sitharaman

Conceding that GST may have some flaws in its present form, finance minister Nirmala Sitharaman on Friday asked tax professionals not to curse it and sought their help to make it better.

The minister was replying to the concerns raised by taxation industry professionals here, who said the industry was “cursing” the government over how the GST was implemented.

Billed as the biggest reform in indirect taxation, the goods & services tax, which does away with a host of levies from the federal to the local government levels, was implemented in July 2017.

On several stakeholders “cursing” GST, Sitharaman even objected to a person who raised the question, and asked him not to damn the law which was passed by Parliament and all the state assemblies.

“After a long time, many parties in Parliament and in state assemblies worked together and came up with the Act. I know you are saying this based on your experiences but suddenly we cannot call ‘what a goddamn structure it is’,” the minister said.

She interacted with people from industries, chartered accountants, company secretaries and many other stakeholders in the financial sector.

Stating that it has been only two years since GST was implemented, she said she would have wished the new structure was satisfactory from day one.

She also said she wants all stakeholders to give some solutions for better compliance. “We cannot damn it. It might have flaws, it might probably give you difficulties but I am sorry, it is the law of the land,” she added.

BM Sharma, a member of the Cost Accountants Association, later explained why he said what he said. “I said that the objective of GST was to ease of doing business, reduce tax complexities, rationalise 13 taxes, and reduce litigation and corruption. But the same is not being achieved due to several problems and industries and professionals are complaining now,” he said.

As Sharma suggested some solutions, the minister asked him to meet her in Delhi.

Earlier during a presser, when asked about the low GST collections, minister attributed it the difficulties due to weather-related disasters and also poor compliance.

“Yes, GST collection in some areas has not been strong enough. Various districts in Maharashtra, Karnataka, Himachal, and Uttarakhand were flooded and we had to postpone filing returns from these areas,” she said.

She also said the revenue secretary has already formed a committee to indentify where collection has not been adequate as per our expectation.

“We have some reports on how in some cases evasion has happened. The committee will look into how this can be plugged and if there has been any under-invoicing,” she said.

Source: Economic-Times

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Govt set to crack down on GST defaulters

Govt set to crack down on GST defaulters

A government panel will discuss on Tuesday ways to intensify enforcement activities against goods and services tax (GST) defaulters who have been identified by a fraud detection software, amid GST collections dropping to a 19-month low in September.

This marks a shift from handholding businesses in the transition phase of the new indirect tax regime to cracking down on tax evaders. Revenue secretary Ajay Bhushan Pandey will be present at the first meeting of the 12-member panel comprising central and state government officials set up last week to boost revenue collection, a person privy to the development said on condition of anonymity.

The panel will discuss ways to check abuse of the lenient approach taken by the government so far.

Data analytics will be used extensively and action will be taken against entities that have been flagged by the software system, said the person, adding that the IT system enables surveillance in a non-intrusive manner to identify offenders. The panel will give its report in 15 days to the GST Council.

“Fake claims of input tax credit and tax evasion at the retail level are two major areas of revenue leakage that are likely to be in regulatory focus. Some steps have been taken recently to ensure that tax credit is not taken without actually paying the taxes,” said Abhishek Jain, tax partner at EY India.

“The new return filing format that will come into force from April 2020 and e-invoicing from January 2020 are steps in the direction of plugging revenue leakage.”

Indirect tax authorities have started comparing sales reported by businesses and traders under GST with what they have reported to income-tax authorities for mismatches. Steps will be taken to check wrongful claims of tax credit, one of the most common ways of tax fraud.

“The panel will have access to a significant amount of comparable data for the past two years on taxpayer compliance and revenues—these should be used to work out ways to enhance revenues without any disturbance to compliant businesses,” said M.S. Mani, partner at Deloitte India.

The GST Council had last week curtailed the provisional tax credit that buyers of goods and services can claim to 20% of the taxes they have paid if the seller does not upload the invoice details and pay the tax collected from the buyer to the government.

The Union government is trying to check tax evasion and make GST more revenue-efficient as it is obligated by law to compensate states for their revenue shortfall irrespective of it meeting revenue targets. The panel will explore ways of raising revenue and widening the tax base without any increase in tax rates. In September, the Centre and states collected ₹91,916 crore in GST, a decline of 2.67% from what was collected in the same month a year ago. This was the first time monthly collections fell below year-ago levels this year.

Source: Live-mint

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GST Council Sets Up Panel To Boost Revenue Collection

GST Council Sets Up Panel To Boost Revenue Collection

The GST Council on Thursday constituted a committee of officers to improve revenue after the collections dropped to a 19-month low of Rs. 91,916 crore in September reflecting weak consumer demand. The second straight month of decline in the GST collections came amid a massive slowdown in the economy, visible in six year low GDP growth numbers for the April-June quarter.
“The committee shall submit its first report within 15 days to the GST Council Secretariat which shall coordinate the meeting of the committee to ensure finalisation of the inception report..,” the GST Council office memo said.

The GST Council, in a memorandum, said that that it has been decided that that a committee of officers from state as well as the Centre is “required to suggest steps to be taken to improve revenue collection”.

The Council expects the newly formed committee to look into “policy measures and changes in the law”, measures to “improve voluntary compliance and improved compliance monitoring and anti-evasion measures” among others.

The aim is to move to GST 2.0 and leapfrog tax reform to its second phase by bringing electricity, oil & gas, real estate and alcohol under its ambit and converging the rate structure into two-three slabs.

The members of the committee, as stated, were the Commissioners, SGST of Maharastra, Tamil Nadu, Uttar Pradesh, West Bengal and Punjab.

The members from the Centre would include Principal Commissioner, GST PW, Joint Secretary (TRU 1 and 2), ADG (ARM and Systems) and Joint Secretary, Revenue.

Besides, the Joint Secretary, GST Council Secretariat and Executive VP, GSTN will also be the part of the committee.

Source: NDTV-Profit.

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At 89.67%, Chandigarh tops GST chart in country

At 89.67%, Chandigarh tops GST chart in country

Leading over all states and Union Territories of the country, Chandigarh ranked first in the country in the Goods and Service Tax (GST) collections by registering 89.67% filing of GST returns in the first six months of the current financial year, from April 1 till September 30.

In a first-of-its-kind achievement since the launch of GST in 2017, Chandigarh posted record filing of returns to top the chart in the first-half of 2019-20 fiscal, leaving behind Punjab, Gujarat and Haryana, which rank 2nd, 3rd and 4th, respectively, while the national average is estimated at 80.1%.
According to the records, Chandigarh has around 30,000 GST number holders from different segments, but automobile industry, screw manufacturers, sanitaryware manufacturers, electronics and hotels are the core areas from where the UT gets maximum GST revenue.

Out of these 30,000 registered GST entities, 18,000 are come under the purview of the excise and taxation department of the Chandigarh administration, while the remaining 12,000 are under the central government. As per the records, in the first six months of the current financial year, recovery of GST under Chandigarh administration is estimated at 94.70%, while for the Centre, the figure stands at 84.64%, which together work out to an average of 89.67%.

“Different teams of the department have been working rigorously to ensure maximum (GST) recovery. Besides the major manufacturers, automobile industry and other major players, we keep a constant check on the small businessmen as well. Consistent check on bogus firms also played a vital role in nailing down the tax evaders and we have taken strict action against them,” said a senior officer monitoring the exercise.

“We have not been giving registration number to just any company or business entity without making a spot visit to ensure it exists. Moreover, eWay billing system, which recently started, has brought a drastic change and its report play a crucial role in catch the tax evaders. Also, regular collaboration

Source: Times-Of-India

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GST collection slips below Rs 1 lakh crore mark to Rs 91,916 crore in September

GST collection slips below Rs 1 lakh crore mark to Rs 91,916 crore in September

In another indicator of economic slowdown, GST collection has dropped below Rs 1 lakh crore mark to Rs 91,916 crore for September. The September collection is believed to be the lowest in nineteen months.

The revenue during September, 2019 has declined by 2.67% in comparison to the revenue during September, 2018. During April-September, 2019 vis-à-vis 2018, the domestic component has grown by 7.82% while the GST on imports has shown negative growth and the total collection has grown by 4.90%

CGST is Rs 16,630 crore and SGST is Rs 22,598 crore. IGST is Rs 45,069 crore (including Rs 22,097 crore collected on imports) and Cess is Rs 7,620 crore (including Rs 728 crore collected on imports). The total number of GSTR 3B Returns filed for the month of August up to 30th September, 2019 is 75.94lakh.

The government needs over Rs 1 lakh crore GST in order to meet its fiscal target and also to not compensate states for losses. It compensates states once in every two months for the losses they incur in the first five years of the implementation of GST.

The government has already transferred Rs 27,955 crore to the states in the form of compensation in June-July this year and Rs 17,789 crore in April-May.

Source: Economic-Times

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