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GST officers to immediately suspend taxpayer’s registration for ‘significant anomalies’ in sales return

GST officers to immediately suspend taxpayer’s registration for ‘significant anomalies’ in sales return

GST officers will immediately suspend registration of taxpayers whose sales return or GSTR-1 forms show “significant differences or anomalies” from the return filed by their suppliers, a move aimed at curbing tax evasion and safeguarding revenues.

The Central Board of Indirect Taxes and Customs (CBIC) has issued a Standard Operating Procedure (SOP) for suspension of registration of a person on observance of such discrepancies /anomalies which indicate violation of the GST Act.

As per the SOP, the registration of specified taxpayers shall be suspended and system generated intimation for suspension and notice for cancellation of registration in form GST REG-31, containing the reasons of suspension, shall be sent to such taxpayers on their registered e-mail address.

The registration would be suspended in cases where a comparison of the returns furnished by a registered person with the details of outward supplies furnished in form GSTR-1, or the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their GSTR-1, show ‘significant differences or anomalies’, indicating contravention of the provisions of the GST Act.

“Till the time functionality for FORM REG-31 is made available on portal, such notice/intimation shall be made available to the taxpayer on their dashboard on the common portal in Form GST REG-17.

“The taxpayers will be able to view the notice in the ‘View/Notice and Order’ tab post login,” the SOP said.

Goods and Services Tax (GST) officers have already intensified their drive against fake invoicing and this has also contributed to increase in tax collections in the past couple of months.

GST collections have crossed the ₹1 lakh crore mark for four consecutive months and surged to an all-time high of about ₹1.20 lakh crore in January.

The SOP further said the taxpayers whose registrations are suspended would be required to furnish reply to the jurisdictional tax officer within 30 days from the receipt of such notice / intimation, explaining the discrepancies / anomalies and the reasons as to why their registration should not be cancelled.

Reply has to be sent to the jurisdictional officer through the common portal within 30 days from the receipt of notice / intimation.

In case the intimation for suspension and notice for cancellation of registration is issued on ground of non-filing of returns, the said person may file all the due returns and submit the response, the SOP added.

Source: Economic-Times.

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FM asks GST officers to proactively address issues faced by biz in tax compliance

FM asks GST officers to proactively address issues faced by biz in tax compliance

Finance Minister Nirmala Sitharaman on Wednesday asked GST officers to foresee the issues faced by domestic businesses and address them proactively so that they can compete on a global scale and build a self-reliant India.

In a message to tax officers on the third anniversary of Goods and Services Tax (GST), Sitharaman also said there is scope for easing compliance further for taxpayers, especially MSMEs.

Asking taxmen to focus on the clarion call by Prime Minister Narendra Modi for an ‘Atmanirbhar Bharat’, she said for this motto of self reliance tax, especially GST, administration will have a large role to play.

“We must foresee the issues faced by our business community and proactively address the same to enable them to compete on a global scale. Only by this proactivity can we ensure much needed economic growth in near future,” she said in the message on the occasion of GST Day, 2020.

GST, which subsumed over a dozen local taxes, was introduced on July 1, 2017. Since then the GST process has been simplified and return filing made easy especially for small businesses.

The GST administration has also introduced SMS-based return filing system for ‘NIL’ filers.

Sitharaman said more efforts are required to ease tax compliance further for taxpayers and made an assurance that the government is committed to continuing these reforms in future as well to facilitate taxpayers.

“We must strive to make the tax administration so simple that taxpayers find it easy to comply with all their tax obligations. This is the true essence of ‘ease of doing business’ as far as tax administration is concerned,” she said.

The Minister also said the COVID-19 pandemic has led to some disruptions in the economic activities in the country.

She also congratulated Central Board of Indirect Taxes and Customs (CBIC) and its officers for handholding taxpayers during this crucial time and disbursing record amount of refunds to ease their cash flow.

Source: Economic-Times.

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GST officers arrest one person for creating fake firms, issuing bogus invoices 

GST officers arrest one person for creating fake firms, issuing bogus invoices 

GST officers have arrested one person for creating about 90 fake firms for the purpose of issuing bogus invoices without supply of goods thereon, the finance ministry said on Friday. The officers of Directorate General of GST Intelligence (DGGI), Headquarters, arrested one Anupam Singla, a resident of Sirsa, Haryana, on July 18 after searches conducted at his Delhi residence/offices threw up 110 debit/credit cards belonging to different persons, it said.

During the search operation, GST officers also found blank signed cheque books/ blank cheque books pertaining to 173 different bank accounts, blank bilty books belonging to various transporters, identity proofs of different persons, mobile SIM cards and other incriminating documents.

“The firms opened by Singla issued invoices worth Rs 7,672 crore, including the circularly traded value, with a GST component of Rs 660 crore.

“The said firms have passed on fraudulent ITC to some of the well established traders and cotton yarn spinners who have availed of the same to discharge their GST liability with an ulterior motive to defraud the government exchequer,” the ministry said.

During the investigations conducted so far into the fake billing racket in the cotton industry, the DGGI Headquarters has recovered an amount of Rs 32.60 crore towards GST evasion, it added. JD ANU ANU

Source: Economic Times.

No input tax credit if GST returns not filed, says HC

No input tax credit if GST returns not filed, says HC

The Telangana high court has ruled that no input tax credit (ITC) is available unless GST returns are filed and a taxpayer is liable to pay penalty on the entire liability. The ruling is expected to have a significant impact on all businesses that use tax credits available on inputs and raw materials to reduce payment in cash.

“…until a return is filed as self-assessed, no entitlement to credit and no actual entry in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry,” Justices V Ramasubramanian and P Keshava Rao said in a case involving Megha Engineering & Infrastructures and GST Authorities.

The company had delayed filing the GST returns from July 2017 to May 2018 when its tax liability added up to Rs 1,014 crore. It had ITC of Rs 968 crore and it claimed that the shortfall was to the tune of Rs 45 crore. While the tax authorities demanded 18% interest on the entire amount, Megha Engineering argued that interest should only be calculated on the net tax liability, after deducting ITC from the total liability. The court upheld the department’s view.

“The ruling has very wide implication as almost all taxpayers, who delayed filing returns and have paid interest only on cash payment of tax and not on the GST amount set off by them through ITC. The issue will open a floodgate of litigation and demands of interest by GST officials are imminent. Even CAs while auditing Annual GST Returns, which have to be filed by June 30, may be required to point out short payment of interest due to delayed set-off,” said tax lawyer RS Sharma.

Tax experts said that companies were relying on VAT rulings and clearing cash dues to employees and suppliers before paying GST and the ruling will change this practice. “Businesses should be very cautious in understanding the distinction between the VAT position and the GST position as the consequences could be very severe. This decision states this aspect very clearly,” said M S Mani, partner at Deloitte India.
Sharma said some respite may come in the future.

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Source: Times of India.
FISME facilitates meeting of MSME exporters with GST officials over pending IGST refund

FISME facilitates meeting of MSME exporters with GST officials over pending IGST refund

Large number of exporters from Micro, Small and Medium Enterprises (MSMEs) sector held a meeting with senior GST officials over their pending refunds due to drawback issue in Integrated Goods and Service Tax (IGST). The meeting was facilitated by Federation of Indian Micro and Small & Medium Enterprises (FISME) in the national capital.

More than 70 exporters were present in the meeting.

SK Rahman, Additional Director General, Directorate of GST along with other officials were present in the meeting.

On the vex issue of refund of IGST in cases where exporters ‘erroneously’ opted for higher drawback, Rahman apprised them about a recent CBIC Circular which said “…There is no justification for re-opening the issue at this stage.”

He elaborated that the directorate can’t reopen the issue at this stage as it may lead to double claims or would result into CAG’s objection.

“It has been noted that exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own -volition. Considering the fact that exporters have made aforesaid declaration while claiming the higher rate of drawback, it has been decided that it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. There is no justification for re-opening the issue at this stage,” Rahman read the CBIC circular which was release in October.

He said that in August 2018 also it was clarified to the exporters during a meeting that the issue cannot be reopened at this stage.

Many exporters shared their anguish towards the CBIC order crying that crores of rupees are stuck due to this issue and leading to working capital shortage.

Giving a patient hearing to the exporters on this issue, Rahman asked them to make a representation to the highest authority.

Also, the GST officials answered the queries of exporters related to GST issues that are troubling the exporters.

The officials also requested the exporters to make the use of help desk that has been set up for 100 days just to solve the issues of the taxpayers.

Pankaj Bansal, FISME Treasurer, said, “Exporters are facing significant shrinkage in their working capital under the new system which is restricting their ability to take in new orders. Because of the drawback issue, the exporters have come under huge credit burden and facing enormous fall in their turnover.”

After the meeting, Bansal said the some concerns of the exporters have been addressed but the refund of IGST issue still remains.

He said the exporters, who have formed a forum, will make a representation and submit to the concerned departments for successful resolution of their issues.


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Sources : KNN India