CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases | https://www.nyca.in ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases Fri, 19 Jul 2024 04:37:00 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 https://www.nyca.in/wp-content/uploads/2022/08/9060CA_logo_icai-1.jpg CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases | https://www.nyca.in 32 32 52nd GST Council Meeting: Detailed Agenda and Minutes Available Online https://www.nyca.in/52nd-gst-council-meeting-detailed-agenda-and-minutes-available-online/ https://www.nyca.in/52nd-gst-council-meeting-detailed-agenda-and-minutes-available-online/#respond Fri, 19 Jul 2024 04:37:00 +0000 https://www.nyca.in/?p=12548 Access the detailed agenda and minutes from the 52nd GST Council meeting held on October 7, 2023. Review Volume I, Volume II, Addendum, and the official minutes book on the GST Council website.

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The detailed agenda and minutes from the 52nd GST Council meeting held on October 7, 2023, are now accessible on the GST Council website.

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]]> https://www.nyca.in/52nd-gst-council-meeting-detailed-agenda-and-minutes-available-online/feed/ 0 GST Council Recommends Biometric Aadhaar Authentication for GST Registrations to Combat Fraud https://www.nyca.in/gst-council-recommends-biometric-aadhaar-authentication-for-gst-registrations-to-combat-fraud/ https://www.nyca.in/gst-council-recommends-biometric-aadhaar-authentication-for-gst-registrations-to-combat-fraud/#respond Fri, 28 Jun 2024 05:44:21 +0000 https://www.nyca.in/?p=11714 Learn why the GST Council recommended biometric-based Aadhaar authentication for GST registrations. This measure aims to reduce fraudulent ITC claims, based on successful pilot projects in Gujarat, Puducherry, and Andhra Pradesh. Discover how it enhances the GST system's integrity.

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The story so far: On June 22, the GST Council recommended introducing biometric-based Aadhaar authentication for GST registrations in a phased manner. During a media interaction after the council meeting, Finance Minister Nirmala Sitharaman stated that the measure aims to combat fraudulent input tax credit (ITC) claims made through fake invoices. She highlighted that the measure was formalized based on positive feedback from pilot projects conducted in Gujarat and Puducherry, as well as a study in Andhra Pradesh. This initiative is expected to be implemented nationwide soon.

What fraud is the measure trying to mitigate? Input tax credit (ITC) claims allow businesses to reduce their tax liability by offsetting the tax already paid on inputs against the tax liability on the output. For instance, if a manufacturer pays Rs 120 as tax on inputs and their total tax liability is Rs 300, they can claim ITC to reduce the net payable tax to Rs 180.

Since the introduction of the GST regime, numerous frauds involving fake invoices have been detected. These frauds involve using fake invoices to fraudulently claim ITC, inflate turnovers, and facilitate money laundering. Fake invoices are generated without any actual supply of goods or services.

In a 2019 office memorandum, the Central Board of Indirect Taxes and Customs (CBIC) identified three main methods of executing these frauds:

  • Direct Use of Fake Invoices: Invoices are used without receiving any goods or services to show tax payment and avail ITC claims, resulting in a loss to the exchequer.
  • Diversion of Goods: Invoices are issued to one entity, but goods are diverted to another. The purchaser may not be involved in producing output, yet they avail ITC claims unrelated to the transaction, potentially shifting ITC from exempted to taxable supplies.
  • Circular Transactions: Invoices are routed through a series of shell companies to transfer ITC in a circular manner, increasing turnover without actual supply. This mix of inadmissible and legitimate credit results in revenue loss.

In May last year, the CBIC launched a drive against bogus registrations and fake invoices. Over seven months, the drive detected 29,273 bogus firms involved in ITC evasion totaling Rs 44,015 crore. This translated to savings of Rs 4,646 crore, with Rs 3,802 crore blocked ITC claims and Rs 844 crore recovered. Additionally, 121 arrests were made.

What is the motive behind these frauds? Apart from GST evasion, these frauds facilitate money laundering and fake purchases for income tax benefits. Showing reduced profit margins and higher expenses helps in reducing net profits for tax benefits. Entities can also present inflated turnovers to obtain higher credit limits, bank loans, and improve valuations for stake sales or IPOs. The fake invoice scheme can also divert company funds to save on taxes.

Would these measures help? Tax experts believe that the measure is “progressive in nature” and would help achieve its stated goals. However, the success depends on each state government’s readiness, including resources and training for GST officials. The functionality must also be user-friendly for large-scale implementation.

One expert noted that focusing on high-risk applicants with a history of cancelled or suspended registrations underscores the commitment to a “credible and transparent GST system.” Supported by the Directorate General of Analytics and Risk Management (DGARM) and GSTN, the measure would enhance the security and integrity of the registration process. The industry hopes for a single biometric authentication across India, allowing one-time verification for companies with a presence in multiple states, thus streamlining the process and reducing redundancy.

While acknowledging potential discrepancies in Aadhaar information, experts agree that the majority of future registrations would gain credibility due to this exercise.

Source: The Hindu

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]]> https://www.nyca.in/gst-council-recommends-biometric-aadhaar-authentication-for-gst-registrations-to-combat-fraud/feed/ 0 Understanding the Implications of the Kerala High Court’s Decision on Extension of Limitation for Issuance of Show Cause Notice https://www.nyca.in/understanding-the-implications-of-the-kerala-high-courts-decision-on-extension-of-limitation-for-issuance-of-show-cause-notice/ https://www.nyca.in/understanding-the-implications-of-the-kerala-high-courts-decision-on-extension-of-limitation-for-issuance-of-show-cause-notice/#respond Wed, 12 Jun 2024 07:15:06 +0000 https://www.nyca.in/?p=10799 Delve into the Kerala High Court's ruling on CGST Act limitations, a significant legal milestone.

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Introduction:

In a recent landmark case, Faizal Traders Private Limited v. Deputy Commissioner, Central Tax and Central Excise, Palakkad, the Hon’ble Kerala High Court deliberated on the validity of Notifications extending the period of limitation for the issuance of Show Cause Notices under Section 168A of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). This article aims to dissect the facts of the case, explore the pertinent issue, and analyze the court’s decision.

Facts of the Case:

Faizal Traders Private Limited, operating in the IHK Service to the southern railway and supplying Top-up Coupon and Recharge Coupon of M/s. BSNL as a Franchisee, contested an assessment order-in-original dated June 21, 2023 (“the Impugned Order”). The Petitioner argued that the Impugned Order was barred by limitation and challenged Notification No. 13/2022-Central Tax dated July 05, 2022, and Notification No. 09/2023-Central Tax dated March 31, 2023 (“the Impugned Notifications”), which extended the time limit for the Revenue Department to issue Show Cause Notices.

Issue:

The central issue before the court was whether the Revenue Department had the authority to issue Notifications for extending the period of limitation under Section 168A of the CGST Act due to COVID-19 for the issuance of Show Cause Notices.

Held:

The Hon’ble Kerala High Court, in WP (C) No. 24810 of 2023, upheld the validity of the Impugned Notifications and dismissed the writ petition challenging them. The court observed that the Notifications were issued by the Central Government based on the recommendations of the GST Council, considering the impact of the COVID-19 pandemic on the Department’s operations. Noting the recommendation, the court highlighted that the limitation under Section 73 of the CGST Act was extended for the FY 2017-2018 until September 30, 2023, pursuant to the powers envisaged under Section 168A of the CGST Act, 2017. The court opined that the government had the authority to extend the limitation period for conducting proceedings under Section 73 of the CGST Act through the issuance of the Impugned Notifications, considering COVID-19 as a force majeure event.

Conclusion:

The Kerala High Court’s decision in Faizal Traders Private Limited v. Deputy Commissioner, Central Tax and Central Excise, Palakkad, sets a significant precedent regarding the extension of limitation for the issuance of Show Cause Notices under the CGST Act. By upholding the validity of the Impugned Notifications, the court recognizes the exceptional circumstances posed by the COVID-19 pandemic and affirms the government’s authority to address such situations through regulatory measures.

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]]> https://www.nyca.in/understanding-the-implications-of-the-kerala-high-courts-decision-on-extension-of-limitation-for-issuance-of-show-cause-notice/feed/ 0 GST Council is unlikely to take up any rate rationalisation at its upcoming 50th meeting https://www.nyca.in/gst-council-is-unlikely-to-take-up-any-rate-rationalisation-at-its-upcoming-50th-meeting/ https://www.nyca.in/gst-council-is-unlikely-to-take-up-any-rate-rationalisation-at-its-upcoming-50th-meeting/#respond Thu, 25 May 2023 09:57:09 +0000 https://www.nyca.in/?p=2596 The Goods and Services Tax (GST) Council is unlikely to take up any rate rationalisation at its upcoming 50th

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The Goods and Services Tax (GST) Council is unlikely to take up any rate rationalisation at its upcoming 50th meeting to be held next month.
Finance Ministry sources said that the centre is not planning any major rationalisation of GST rates or tax slabs until after the 2024 Lok Sabha elections.
“Rationalisation of rates is a continuous exercise. However, we are not keen on it currently,” the official said.
The GST Council will, however, have to appoint a new chairperson for its group of ministers (GoM) leading the rate rationalisation exercise. Former Karnataka chief minister Basavaraj S. Bommai chaired this GoM.
It remains to been what changes are made to the GoM, given that it has not submitted the final report on rate rationalisation.
The GoM was set up in September 2021 to review the GST rate structure of, including fixing anomalies in the inverted duty structure, with the objective of simplifying rates, reducing classification-related disputes and enhancing revenue.
An interim report has been submitted by the seven-member GoM last year with suggestions for correcting the inverted duty structure.
There is also lack of consensus among the members of the GoM with respect to revising the GST tax slabs.
Currently, GST has a four-tier slab structure of 5, 12, 18, and 28 per cent. Essential items are either exempted or taxed at the lowest slab, while luxury and ‘sin-goods’ ‘attract the highest tax rate. On the top of the highest slab, a cess is also levied on luxury and sin goods.

Source: https://www.businesstoday.in/latest/economy/story/gst-rate-cuts-in-limbo-as-elections-loom-council-to-appoint-new-chairperson-for-gom-381679-2023-05-17

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]]> https://www.nyca.in/gst-council-is-unlikely-to-take-up-any-rate-rationalisation-at-its-upcoming-50th-meeting/feed/ 0 Key GST GoMs Likely To Be Reshuffled https://www.nyca.in/key-gst-goms-likely-to-be-reshuffled/ https://www.nyca.in/key-gst-goms-likely-to-be-reshuffled/#respond Thu, 25 May 2023 07:22:14 +0000 https://www.nyca.in/?p=2573 The Goods and Services Tax Council will have to appoint a new chairperson for the key group of ministers (GoM)

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The Goods and Services Tax Council will have to appoint a new chairperson for the key group of ministers (GoM) on rate rationalisation following the Karnataka state elections. Former Karnataka chief minister Basavaraj S Bommai, who resigned following the BJP’s rout in the assembly elections, was the convenor of the GoM on GST rate rationalisation.
The GoM was set up in September 2021 to review the rate structure of the indirect tax levy including the correction of inverted duty structure with the objective to simplify rates, reduce classification related disputes and enhance revenue.
The seven-member GoM had submitted an interim report on rate rationalisation in June 2022 for correcting the inverted duty structure of a number of items but its larger task of reviewing the rate structure for GST is still pending. Government sources have indicated that an overhaul of the GST structure is unlikely until the 2024 General Elections.
Typically, a minister from the same state is inducted into the GoM when a member steps down. However, with a Congress government to assume power in the state, it is unclear whether this would be the case. When West Bengal finance minister Amit Mitra, who was also a member of the GoM, stepped down, he was replaced by his colleague in the state cabinet, Chandrima Bhattacharya, who is minister for state for urban development and municipal affairs.
Besides the chairperson, another member to the GoM would also have to be appointed in place of former Bihar deputy chief minister Tarkishore Prasad who stepped down in August 2022. Sources said that there has been no move to appoint his replacement on the GoM till now.
“As of now, no meeting of the GoM on rate restructuring is planned. A new chairperson may be appointed once the new government in Karnataka is sworn in. It is still early days,” said an official source, adding that a replacement for Prasad is also awaited.
Other members of the GoM include Kerala finance minister KN Balagopal, Goa minister for transport and Panchayati Raj Mauvin Godinho, Rajasthan minister for local self government, urban development and housing Shanti Kumar Dhariwal and Uttar Pradesh finance minister Suresh Kumar Khanna.
Meanwhile, with the Cabinet reshuffle in Tamil Nadu, two other GoMs of the GST Council – related to system reforms and another on casinos, race courses and online gaming, will have to be reconstituted with a new member. Until now, Palanivel Thiaga Rajan, the former finance minister and current IT minister of Tamil Nadu, was a member of these two GoMs. However, he is likely to be replaced by the new finance minister Thangam Thennarasu.
The official source said that as of now, there has been no communication regarding any changes to these GoMs.

Source: https://www.financialexpress.com/economy/key-gst-goms-likely-to-be-reshuffled/3088911/

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