Page 12 - Banking Finance January 2020

GST UPDATE

GST officials can seize property, bank accounts in case Govt to discuss GST over-

GST returns not filed haul after Budget
With over 1 crore GST-registered entities failing to file return on time, the new Finance ministers from the Centre and
set of rules enable GST-authorities to seize their prop- states will re-
erty and banks accounts in case despite repeated re- portedly discuss
minders you fail to file tax returns. Top officials of the an overhaul of
Central Board of Indirect Taxes and Customs have the GST slabs
been told to go hard on defaulters. The process to and rates. Offi-
nudge the entity and its officials will begin three days cials will also discuss methods to
ahead of the deadline for filing GSTR-3A of the final returns. The due date for stem the shortfall in revenue collec-
the same is by the 20th of every month. Post the due date, a system-generated tion and GST compensation to states
message will be sent to all the defaulters asking. for the next fiscal, a source said.
All the authorised signatories of the entity, proprietor of the entity, partners of A rate hike on items such as per-
a firm, directors of companies or the kartas in case of HUFs will also receive the fumes, cosmetics and vacuum clean-
system generated message. If the entity fails to comply, five-days after the due ers, which were recently moved from
date, an electronic notice will be served, giving it 15 days to furnish the returns. the 28 percent slab to the 18 per-
If the notice elicits no response, tax officials have been told to undertake an cent slab, may be discussed in future.
assessment of the tax liability after factoring in the available data. The Centre and some states have
been locked in a tussle over payout
The CBIC, in the three-page standard operating procedure issued on Tuesday
of GST compensation cess. The Cen-
has decided to go strong against "defaulters". The SOP issues states, "For the
tre is expected to face a shortfall of
purpose of assessment of tax liability... the proper officer may take into account Rs 63,200 crore in GST compensa-
the details of outward supplies available in the statement furnished under sec- tion cess collection, according to a
tion 31 (Form GSTR-1), details of supplies auto-populated in FORM GSTR-2A, media report. Two days before the
information available for e-way bills, or any other information available for any
GST Council's meet on December 18,
other source, including from inspection.”
the Centre had released Rs 35,298
crore to states and Union Territories
GST officials rescues Rs 241-cr tax evasion through fake as compensation cess.

invoicing 15th Finance Commission (FFC) Chair-
GST officials have unearthed a racket involving fake invoicing worth Rs 1,600 man NK Singh recently highlighted
crore that resulted in tax evasion of Rs 241 crore, an the need to simplify the GST struc-
official release said. The racket was busted by the anti- ture. The Budget will most likely in-
evasion wing of CGST Delhi South Commissionerate. clude the recommendations of FFC,
which submitted an interim report to
The main culprit was arrested and remanded to 10 days
President Ram Nath Kovind and Fi-
of judicial custody by a local court, the release by finance nance Minister Nirmala Sitharaman
ministry said. The alleged racketeer had created sev- earlier in December.
eral firms on the basis of unauthorised access to identity documents of various
The Centre wants states to take a cut
persons.
in their compensation dues, which is
The ministry said the Commissionerate discovered the case of fake invoicing and currently at 42 percent, a move that
GST fraud alongside a "new modus operandi" of defrauding the exchequer by states have opposed. A similar sugges-
exploiting the facility of refunds given for inverted duty structure. "Over 120 tion made by the FFC in September
entities who are involved in the transactions have come to light so far, involving did not get a favourable response
fake invoicing of Rs 1,600 crore and tax evasion of Rs 241 crore," it added. from states. Resolution of the issue

It further said investigations in the case have unearthed a well organised racket between the Centre and states will
of creating bogus firms, issuing fake invoices and bogus e-way bills to generate have a bearing on the final FFC report
and encash tax credits. for five-years ending FY26.

12 | 2020 | JANUARY | BANKING FINANCE