State Registers Increase of About Rs 3K Crore in GST Collection

editor — Tue, 16 Apr 2024 07:21:40 +0000

Introduction

In the fiscal year 2023-24, the state government witnessed a significant surge in its GST (Goods and Services Tax) collection, amounting to an increase of Rs 3,000 crore compared to the previous financial year. This surge, totaling Rs 42,000 crore in GST collection, marks a substantial leap from the Rs 39,000 crore collected in the fiscal year 2022-23.

Boost in Revenue

The finance department disclosed that the overall revenue collection for the current fiscal year is projected to reach Rs 61,000 crore, encompassing not only GST but also other commercial taxes such as sales tax, electricity duty, and professional tax.

Zero Tolerance Policy

A key driver behind this remarkable uptick in revenue is attributed to the stringent measures implemented by the authorities, particularly in the realm of return filing. A finance department official highlighted the adoption of a zero-tolerance stance towards non-compliance, coupled with extensive outreach efforts targeting every taxpayer, including trade houses. District-level officers played a pivotal role in facilitating compliance and resolving potential issues, ensuring a conducive environment for revenue augmentation.

Combatting Fraudulent Activities

Notably, the Directorate of Commercial Taxes, West Bengal, intensified its vigilance against fraudulent practices, particularly the proliferation of bogus companies in various pockets across the state. Instances of malpractice, such as the utilization of fabricated documents like rent receipts and electric bills for illicit registration purposes, were brought to light. Rigorous crackdowns on such malfeasance, initiated since December 2021, have resulted in the cancellation of registrations for sham entities on a monthly basis, thereby safeguarding the integrity of the GST framework and bolstering revenue inflows.

Legal Implications

Under Section 132 of the CGST Act 2017, the issuance of invoices without corresponding supply of goods or services, along with the wrongful availing or utilization of Input Tax Credit, is deemed a cognizable and non-bailable offense. This statutory provision underscores the gravity of fraudulent activities within the GST ecosystem and underscores the imperative for stringent enforcement measures.

Registration not to be cancelled retrospectively when vague SCN is issued and no reasonable opportunity granted to file reply

editor — Tue, 19 Mar 2024 12:25:25 +0000

The Delhi High Court, in the case of M/s. Friends Media Add Company vs. Principal Commissioner of Goods and Service Tax [W.P.(C) No. 1260 of 2024 dated February 12, 2024], altered the GST cancellation ruling to apply prospectively from the date of the show cause notice (SCN). The court held that GST registration should not be revoked retroactively if the SCN lacks clarity and no opportunity was given to contest the retrospective cancellation.

Facts of the case:

The Revenue Department (referred to as “the Respondent”) issued an SCN on August 25, 2023, to M/s. Friends Media Add Company (referred to as “the Petitioner”), alleging issuance of invoices or bills without actual supply of goods or services, resulting in improper claim of input tax credit or tax refund. Subsequently, the GST registration of the Petitioner was cancelled retroactively via an order dated December 12, 2023 (referred to as “the Impugned Order”).

The Petitioner challenged the Impugned Order through a writ petition before the High Court, arguing that the SCN lacked specificity as it did not cite any instances of invoices or bills issued without actual supply of goods or services, which formed the basis of the SCN issuance.

Issue:

Whether GST registration should be cancelled retrospectively when the SCN issued is vague in nature and no opportunity was granted to file objection against retrospective cancellation?

Held:

The Hon’ble Delhi High Court in Writ Petition (C) No. 1260 of 2024 held as under:

Section 29(2) of the Central Goods and Services Act, 2017, empowers the Proper Officer to cancel GST registration retrospectively, but this should not be done mechanically and must be based on objective criteria.
The mere failure to file returns for a certain period should not automatically lead to retrospective cancellation, especially if returns have been filed and taxes paid for other periods.
The Proper Officer must consider that retrospective cancellation could deny credit to the petitioner's customers for supplies made during the affected period.
The SCN did not adequately notify the petitioner of the possibility of retrospective cancellation.
The petitioner was not given an opportunity to object to the retrospective cancellation of GST registration.
Therefore, the court ordered that the cancellation be modified to operate prospectively from the date of issuance of the SCN.

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State Registers Increase of About Rs 3K Crore in GST Collection

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Registration not to be cancelled retrospectively when vague SCN is issued and no reasonable opportunity granted to file reply

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