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Tax arrears of Gujarat industrial units at Rs 30,000 crore

Tax arrears of Gujarat industrial units at Rs 30,000 crore

The combined tax arrears of over 48,000 industrial units in Gujarat stood at Rs 30,000 crore as on June 30, 2019. Official sources in the state finance department said the taxes that remained unpaid include sales tax and value added tax (VAT) for the period before the introduction of the goods and services tax (GST) in 2017. Of these units, there are nearly 6,400 units with tax bills of more than Rs 10 lakh.

The figure includes long-pending dues, says PD Vaghela, commissioner of commercial tax, adding that over 50% of these units have gone for appeal mostly in sales tax and VAT related cases.

“We have formed teams to speed up the recovery process of these bills. Some of the units have not even paid taxes over the period of 15 years and more. Some units have closed down, but the authorities are in the process of slapping notices to owners of these industrial units,” said a senior official. Interestingly, many units failed to pay even GST, despite the fact that there are strict provisions including that of jail terms.

Vadodara tops the list of defaulting industrial units with unpaid taxes over Rs 10 lakh, with Rs 6,431 crore due from nearly 700 such units in the city. Some of the other districts with high amount of due taxes are Kutch (Rs 4,569 crore), Surat (Rs 4,250 crore), Morbi (Rs 2,766 crore) and Bhavnagar (Rs 1,722 crore).

The Gujarat government is estimating GST income to the tune of Rs 48,000 crore in the recently presented budget for 2019-20. In such a scenario, such a huge amount of unpaid taxes would hamper various development-related schemes. Sources in the GST department said that not only recovery, but strict actions were being taken to curb GST theft as in June 2019, and over 280 raids were conducted and GST theft of more than Rs 6,000 crore caught.

Source: Financial Express

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Since GST rollout in July 2017, Rs 45,682.83 crore fraud detected

Since GST rollout in July 2017, Rs 45,682.83 crore fraud detected

A total of 9385 cases of tax fraud involving amount of Rs 45,682.83 crore has been detected by the tax authorities under the Goods and Services Tax (GST) regime since its rollout from July 1, 2017, government data showed. Out of this, 1,593 tax fraud cases involving an amount of Rs 6520.40 crore have been detected in April-June, the first three months of this financial year.

In a response to a question regarding tax frauds under GST, Minister of State for Finance Anurag Thakur said tax fraud worth Rs 37,946.41 crore was detected in 7368 cases in 2018-19.

Also, in 2018-19, Rs 11,251 crore worth of cases of tax credit availment by issue of fake invoices were detected by the tax authorities and Rs 2,805 crore in April-June of the current fiscal, Thakur said in his written reply.

Just five cases of tax credit availment by fake invoicing were detected by Central GST formations in the first year of the GST implementation (July 2017 to March 2018) involving an amount of Rs 12.67 crore and two persons were arrested.

The government said it has taken various measures to curtail these types of fraud. “Field formation(s) of CBIC, are sensitized to keep check on these kinds of activities and take necessary action.

A specialised Directorate within the Central Board of Indirect Taxes and Customs (CBIC) engaged in Data Analytics & Risk Management disseminates analytical reports and intelligence inputs to field formations of CBIC for the purpose of scrutiny, audit and enforcement, to check GST evasion in general and fraudulent credit availment in particular,” Thakur said in his reply.

In 2018-19, 1,620 cases of fake invoicing were detected involving Rs 11,251.23 crore, and 154 persons were arrested. Between April-June of 2019-20, 666 cases of fake invoicing were detected and the amount involved stood at Rs 2,804.98 crore. A total of 41 persons were arrested.

To a query on tax fraud cases after the GST rollout, Thakur said 424 cases involving Rs 1,216 crore were detected between July-March period of 2017-18. Another 7,368 cases involving Rs 37,946.41 crore were detected in 2018-19 and 1,593 cases of Rs 6,520.40 crore were detected in April-June of 2019-20.


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Source: Indian-Express
GST rate on cement, steel, pipes, roofing sheets and other building materials: Implications on housing sector

GST rate on cement, steel, pipes, roofing sheets and other building materials: Implications on housing sector

The Indian cement industry is the second largest cement producer in the world. The Government of India is focussing on developing affordable housing. However, due to high GST rate of 28%, the cementindustry is not being able to work on low economies of scale resulting in a higher cost for the affordable housing sector. The government should take serious note of reducing the GST rate from 28% to 18% to boost the cement industry which would provide an ultimate boost to the infrastructure and housing sectors.

In the pre GST era, the rate of tax on steel was around 19.5% (Excise rate 12.5%, VAT 5%, CST 2%). After the implementation of GST, with effect from July 1, 2017, the rate of GST for steel is 18% and for some of the input used by the steel industry like iron, coal & transportation services, the GST rate is as low as 5%. As a result of the low tax rate, the overall cost of steel will decrease. This will have a positive impact on the housing sector.

Most of the pipes used for the construction of buildings were earlier taxed at 28% and later the rate was reduced to 18%. But still the rates are higher, and the government should reduce the rate to 12%. This will give a boost to the housing sector.

Roofing sheet is one of the most useful items for the construction of buildings. The GST rate for roofing sheets is 18%.

GST rate for bricks is in the range of 5% to 28% depending upon the nature of the bricks. Building bricks and bricks of fossil meals attract 5% GST. On the other hand, multicellular or foam glass in blocks, panels, plates, shells or similar forms attract a 28% GST.

Tiles like bricks attract GST rate in the range of 5% to 28%. Roofing and earthen tiles attract 5% GST whereas glazed ceramic flags, paving, hearth or wall tiles attract 28% GST. In the case of bamboo flooring tiles, the GST rate is 18%.

For other items like bathroom fittings GST rate is mainly 28% except for pipe fittings for which, as mentioned above, it is 18%. GST for wallpapers is 28%. Interior products GST rate is between 18% and 28%. In the case of painting and other similar items, the GST rate is 28%.

A person should keep in mind the varied GST rate applicable on inputs and accordingly make a suitable decision. For example, the GST rate varies from 5% to 28% on bricks, marbles & tiles. Also, a person can take benefit of the reduced GST rate on steel. Apart from that, a mix of materials like cement, steel, roofing sheets and others can be used to minimise higher GST input cost on the housing sector.

Source: Economic Times.

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GST collection of states, union territories increased to Rs 5.18 lakh crore in FY19, says Nirmala Sitharaman

GST collection of states, union territories increased to Rs 5.18 lakh crore in FY19, says Nirmala Sitharaman

GST collection of states and union territories increased to Rs 5.18 lakh crore in the financial year 2018-19, a significant rise from Rs 2.91 lakh crore in 2017-18, Union Finance Minister Nirmala Sitharaman said in Parliament on Monday. In a written reply to a question in the Lok Sabha, the Finance Minister said the Centre government released Rs 81,177 crore compensation to the states during the fiscal year 2018-19 against Rs 48,178 crore released in FY18.

Saying the high-powered GST Council had made several efforts to improve tax compliance in the country, Sitharaman said: “The GST collection of the states/UTs has been showing steady improvement over the period of time. In addition, they have also assured the growth of 14 per cent for a period of five years through the payment of compensation by the central government.”

She said efforts like extensive automation of business processes, application of e-way bill mechanism, targeted action on compliance verification, enforcement based on risk assessment and proposed introduction of electronic invoice system had improved the GST revenue collection.

The GST collection figure dipped below the Rs 1 lakh crore mark for the first time in the current fiscal in June (Rs 99,939 crore). The indirect tax revenue for March was Rs 1,06,577 crore, Rs 1,13,865 crore in April, and Rs 1,00,289 crore in May. Goods and Services Tax (GST) was rolled out on July 1, 2017, after subsuming 17 local taxes.

Last month, the GST Council, chaired by Finance Minister Nirmala Sitharaman, met for the first time after the Modi government returned to power. The council extended the tenure of the National Anti-Profiteering Authority by two years till November 2021 and allowed the use of Aadhaar as proof for obtaining GST registration. The matter of tax cut on electric vehicles and their chargers was also sent to the fitment committee for further consideration.


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Source: Business-Today.
Over 2 lakh new registrations in Haryana under GST

Over 2 lakh new registrations in Haryana under GST

Haryana Finance Minister Capt Abhimanyu on Tuesday said that over two lakh new registrations have been added under the GST in the state since its roll-out to the existing base of 2.25 lakh payers under the erstwhile VAT.

The Finance Minister said the progress of implementation of GST right from its roll-out in July 2017 was constantly reviewed in the state. Extensive training programmes were conducted for the training of all stakeholders.

“Workshop, seminars, conferences and interactive sessions with the taxpayers are regularly organised. The State has particularly stressed upon the expansion of the tax base,” an official statement quoted Capt Abhimanyu, as saying.

He said that Haryana is contributing handsomely in the GST collections. A total of Rs 36,815 crore was collected from the State under State GST, CGST, IGST and cess for the eight months of GST implementation during 2017-18.

“It is Rs 4,601 crore per month on an average,” he added.

He said that with regard to the state collections under GST, the state collected Rs 10,178 crore including provisional IGST settlement in the financial year 2017-18.

Capt Abhimanyu said that the protected revenue of the state for the year 2017-18 was Rs 13,200 crore. The total shortfall of the state GST revenue after taking into consideration the recoveries of erstwhile Vat and CST was Rs 1,933 crore in the financial year 2017-18.

The state received Rs 1,199 crore from compensation and Rs 667 crore from provisional IGST settlement during this period.

The Finance Minister said that in the financial year 2018-19, the state collected Rs 55,231 crore under state GST, CGST, IGST, and cess contributing Rs 4,602.56 crore per month on an average.

The total collection for Haryana under all the GST Acts is Rs 55,231 crore as against Rs 11,77,370 crore for all the states in the country.

Source: Business-Standard.

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GST: Steady decline in number of return filers in last four months

GST: Steady decline in number of return filers in last four months

Total number of entities filing GST returns has seen steady declined in the last four months for which data is available. Between February and May this year, the number of entities filing GST return has declined by almost 8 lakh, which is nearly 10% of the total GST return filed in the country. According to latest official information, the number of entities that are required to file GSTR-3B form is around 1.03 crore while the number of entities that have filed return in May this year is little over 75 lakh. It means nearly one fourth of the businesses that are required to file return under the GST law have not done that.

The government admitted in the Rajya Sabha all the taxpayers admitted under GST were filing returns.

“The government is considering to put in place an extensive plan to hunt for these missing GST payers,” Anurag Thakur, minister of state for finance told the Rajya Sabha in response to a question adding that the measures will include tax officers visiting the concerned premises.

It’s bit ironical that during the same period the total number of businesses registered under the GST has gone up by 23 lakhs to 1.03 crore while the number of GST return filers (GSTR-3B) declined by over 10%.

While in February this year, almost 84 lakh of the total over 1 crore businesses registered under the GST had filed their returns, the number of filers declined to 82.5 lakh in March.

The same trend of decline in the number of GST filers further declined to 79 lakh business in April this year while in April it further declined to little over 75 lakh.

In February this year, the government’s gross GST collection was Rs 97,247 lakh crore, then it went up to Rs 1,06,577 crore in March and it an all-time high of Rs 1,13,865 crore in April this year before again declining to Rs 1,00,289 crore in May this year.

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Source: Financial Express
Important dates to remember for GST return filings

Important dates to remember for GST return filings

Filing of returns with the Government within stipulated dates is important for a taxpayer in order to avoid incurring any Interest and Penalty.

Forms GSTR-1 AND 3B are to be filled by a person registered under GST for each month other than the people who are registered under the composition scheme.

The important dates that should be remembered for filing GST returns are:

GSTR-3B is to be filed by all taxpayers and the last -date to file is 20th July 2019.

GSTR-1 is to be paid by taxpayers whose turnover is below Rs. 1.5 Crore and also not opted for Monthly Return. The last date to file is 31st July 2019.

GSTR-1 is to be paid by taxpayer s with turnover above Rs. 1.5 Crore or opted for Monthly returns. The last date to file is 11th July 2019.

GSTR-9 is an annual return and the last date to file is 31st August 2019.

For GSTR-9A, the annual return is to be filled by Composition Dealers and the last date of filing is 31st August.

GSTR-9C is a reconciliation statement to be filled by taxpayers with aggregate turnover exceeding Rs. 2 crore from July 2017 to March 2018. The last date to file it is 31st August 2019.

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Source: KNN-India
Sitharaman says tax targets achievable, GST collections could rise: Report

Sitharaman says tax targets achievable, GST collections could rise: Report

India has given itself achievable targets for its tax collections, Finance Minister Nirmala Sitharaman said in an interview to news daily Hindustan Times, adding that goods and services tax (GST) collections could “absolutely” move higher.

India expects to rake in Rs 24.6 trillion ($358.97 billion) in gross tax revenue in 2019/20. Sitharaman, in her maiden budget last week, raised taxes on the super rich and gold imports in a bid to revive sagging growth.

GST collections fell below Rs 1 trillion ($14.59 billion) for the first time in the current fiscal year in June, projecting weak consumer demand.

“Everyone who thinks we have set stiff targets is probably only looking at GST collections, which slowed down during the elections, for whatever reason,” Sitharaman told Hindustan Times.

“I think we have given ourselves absolutely achievable targets, and after taking everyone on board.”.

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Source: Business-Standard.
Anti-profiteering in GST: Caught in litigation, extension in tenure may not be enough

Anti-profiteering in GST: Caught in litigation, extension in tenure may not be enough

Anti-profiteering provisions have been in force for nearly two years and at the recent GST Council meeting the tenure of the National Anti-Profiteering Authority (NAA) has been extended for two more years, till November 2021. Although the key reason given for this extension was the large pendency of complaints (around 350) which still needs to be investigated, it is fair to say that the presumption is that GST benefits are still not being passed on to consumers. But is the extension of tenure all that is required to ensure compliance with these provisions?

There are also reports that the GST Council, along with the extension of the tenure of the NAA, has approved a new mechanism to check profiteering. Tax officers have been empowered to conduct anti-profiteering checks in their jurisdictions. This clearly signals that complaints and investigations on profiteering will increase and the NAA will be around for much longer than the recent two-year extension. A new penalty may also may be imposed if the profiteered amount is not surrendered within a prescribed time limit.

Given that anti-profiteering related investigations will increase and impose heavier fiscal penalties there is an urgent need to address three key issues:

Introduce an appellate mechanism, within the GST law, for appealing the orders of the NAA;
Broaden the membership of the NAA to include a judicial member; and
Define methodologies/frameworks for compliance.

This will ensure that the core objective of ensuring that benefit of GST is passed on to consumers, is achieved in an efficient and timely manner.

It is worth noting that when NAA was originally constituted in November 2017 for a period of two years, it was set up primarily as a deterrent to big businesses and hence envisioned that its actions would be restricted. This is far from reality and the actions of the NAA have been far more widespread and have impacted almost all sectors and all sizes of businesses.

Considering that there is no appellate mechanism prescribed under the GST laws against an order of the NAA, can it be assumed that the government had not expected challenges on such orders? Whatever may have been the thinking on this aspect, the legal view adopted is that the law does not provide a statutory mandate to appeal orders of the NAA before the Tribunal, High Court or the Supreme Court. Hence, the only recourse for taxpayers is to file a writ petition in the High Court.

Almost all orders of the NAA where profiteering has been alleged, are being challenged in various High Courts. In most cases the courts have stayed the orders and the litigation is in progress. With most NAA orders being embroiled in litigation, the key purpose of the existence of the NAA, which is to ensure that the GST benefit is passed on to the consumer, is yet to be achieved. An alternative form of recourse is required which should assist in the faster resolution of cases.

Some of the writ petitions have challenged the constitutional validity of anti-profiteering provisions. While this challenge is being deliberated by the courts, the government may be able to address some of the other concerns/issues that have been raised.

In the absence of a statutory appellate process, the decision of the High Courts on anti-profiteering matters, will very likely be sent back to the NAA for implementation. This may create a conflict, as the authority that has passed the original order will have to review the orders based on directions of the High Court and then pass a revised order. This is likely to give rise to further litigation. One option to address could be to induct a judicial member on the NAA to ensure that a legal view is also taken into consideration while deliberating on High Court orders. Another option may be to create a body within the NAA to review and implement the orders of the High Court. There may be other options as well and the government should explore all possible alternatives to address this issue. In all such cases, the focus of the NAA should be to resolve the matter, pass on the benefit to the consumer and not litigate further.

As it is likely that anti-profiteering related investigations will increase going forward, there is also an urgent need to introduce an appellate mechanism, within the GST law, for challenging the orders of the NAA. This will ensure that going forward, writ jurisdiction is not the only option for challenging orders of the NAA and may also result in faster resolution of cases.

One key and outstanding demand of tax payers is for a specific mechanism/methodology to calculate profiteering. This may minimise the subjectivity in the investigation process and therefore litigation. The NAA’s position has been, and remains, that a standard methodology cannot be prescribed for all sectors and hence none is being prescribed. This position needs to be revisited urgently, more so as the NAA now has the benefit of experience from over a hundred investigations. The contradictory positions being adopted in some orders has also added to the complexity of complying with the provisions. One option could be to reconstitute sector-specific committees, set up during GST implementation, which were headed by senior tax officers. These committees can provide guidance on prescribing methodology for compliance with the anti-profiteering provisions.

With the focus once again on initiatives for improving Ease of Doing Business in India, anti-profiteering related concerns of taxpayers do need to be addressed on a priority. The trust deficit between the business and tax administration on this subject needs to be reduced to ensure that the key purpose of the consumer benefiting by GST implementation, is served.

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Source: Economic-Times.
Delhi government cancels GST registration of 1,282 traders for fraud

Delhi government cancels GST registration of 1,282 traders for fraud

The Delhi government has cancelled the GST registration of 1,282 traders who were found to be involved in the issuance of fake invoices. In addition, “show cause notices for cancellation have been issued to 3,221 dealers, of which proceedings are still underway​,” a government statement said on Wednesday. ​

The department has directed its tax officers to recover the entire amount of tax, interest and penalty from such dealers as well as to take other legal action against them.

Following directions from Deputy Chief Minister and Finance Minister Manish Sisodia, the Department of Trade and Taxes has identified around 56,000 suspicious​ and ​risky dealers on various risk parameters.

Sisodia reviewed the situation twice in the last one month and ordered strict action against them. The Department, through GST ​inspectors, has conducted ​field verification and inspection of 16,141 suspicious dealers so far. Of them, 4,618 dealers were found to be non-existent​ and ​bogus.

​“These dealers are non-existing/bogus dealers who got registration in GST to defraud the government exchequer by issue and use of fake invoices.​ ​A large number of GST fraud cases involving the use of fake invoices for wrong availment of input credit, which is further used to pay GST on outwards supplies has been detected​,” read the statement. ​

“​The purpose of use of such fake invoices is the fraudulent availment/encashment of input tax credit. The bogus entitles engaged in this activity also defraud other authorities such as banks by deflating turnovers, laundering of money etc.​,” it stated.​

The unscrupulous​ and ​bogus entitles engaged in such activities do not undertake actual trading of goods or services but involve in only paper transactions without physical delivery of goods​ and ​services​, the government noted. After their identification, assistant commissioners and GST officers from the department are taking action against the dealers in accordance with the provisions of GST Act and Rules.

Source: New-India-Express.

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  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE