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 |

GST Dept Achieves Major Revenue Growth Despite Fewer Officers

editor — Tue, 18 Jun 2024 05:06:15 +0000

The annual revenue collection by the Directorate of Commercial Taxes under the state Department of Finance (Revenue) has surged by nearly 300 percent over the last decade. The collection, which was Rs 21,853 crore in 2013-14, rose to Rs 60,617 crore in the recently concluded fiscal year 2023-24.

This significant increase comes despite a reduction in the number of officers, from 3,476 in 2010-11 to 998 in 2023-24, due to administrative restructuring.

The State Goods & Services Tax department (Directorate of Commercial Taxes) contributes over two-thirds of the state’s annual revenue collection.

“Our officers work tirelessly to ensure growth in collection every year by identifying, sensitizing, and addressing points of tax evasion. They undergo training to enhance their skills and adhere to the prescribed acts and rules. These skills are also applied through various technological avenues and data mining methods,” said a representative of the Commercial Taxes Directorate Officers Association (CTDOA).

CTDOA is the primary body within the State Goods & Services Tax Department (Directorate of Commercial Taxes) that supports the general well-being of its members (officers) and assists with all aspects of their activities, including any service-related queries.

Source: Millennium Post

category

IATA opposes GST levy on foreign airlines in India

editor — Wed, 05 Jun 2024 07:25:48 +0000

The International Air Transport Association (IATA) has voiced its opposition to the imposition of Goods and Services Tax (GST) on services rendered by foreign airlines’ headquarters to their local offices in India. According to IATA, foreign airlines should not be held liable for GST on such services.

The Directorate General of GST Intelligence has initiated investigations and issued summons to foreign airlines, alleging tax evasion concerning the import of services by airlines operating in India.

IATA, representing 330 carriers worldwide, firmly opposes this governmental action, asserting that costs incurred by airline headquarters should not be subject to GST. These costs encompass various operational aspects, including aircraft rental expenses, crew, and pilot costs associated with passengers departing from India.

IATA argues that airline branch offices in India do not partake in critical operational functions such as leasing aircraft, hiring crew and pilots, procuring fuel, and maintenance. Instead, all decisions and operations concerning flights to and from India are made, managed, and executed by airline headquarters. Therefore, attributing strategic and operational risks and functions to branch offices in India is legally inaccurate, as stated by IATA.

Source: The Hindu Business Line

category

GST Raids on Eateries Across City Uncover Massive Tax Evasion

editor — Tue, 04 Jun 2024 05:03:36 +0000

Following a successful operation by Central GST officials targeting iron and scrap dealers, which revealed tax evasion amounting to lakhs of rupees, state GST officials have now discovered details of crores in GST evasion and unbilled sales. This revelation came during preliminary investigations after raids on ice cream parlours, juice centres, and food outlets. The three-day operation extended into Sunday, and sources within the department suggest that the probe will likely expand to include many traders involved in the ice cream and juice trades.

The investigation was prompted by widespread complaints that well-known establishments in Ahmedabad, such as Patel Ice Cream and Astodia Juice Centre, along with Surat’s Bismillah and Mahalakshmi Juice and Fast Food Centre, were not issuing proper bills. Upon receiving the go-ahead from Gandhinagar, the department launched the investigation.

Since May 30, GST enforcement teams have raided 24 prominent traders in Ahmedabad, Surat, and Rajkot, all of whom have turnovers in the crores. The investigation, now in its fourth consecutive day, has covered 47 premises associated with these traders, uncovering unbilled transactions worth Rs 40 crore in the preliminary findings. This includes Rs 30 crore in unbilled ice cream sales, Rs 6.75 crore in unbilled bhajiya sales, and Rs 4 crore in unbilled pizza sales.

Bismillah, a well-known brand in Surat and the largest seller of thick shakes in Gujarat, is also under scrutiny. The brand reportedly opened 29 outlets in Ahmedabad without formal contracts or agreements to evade GST, and these outlets are now under investigation.

Benami Bank Accounts on Rent?

Investigations have revealed that some individuals are renting bank accounts from needy people to establish bogus firms and fraudulently claim input tax credits, parking the illicit money in these accounts. In the case of ice cream parlours and juice centres, there were also arrangements to deposit money into these rented accounts through QR codes. Officials are actively investigating this angle, according to sources.

Source: Ahmedabad Mirror

category

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.

category

Income Tax Department Cracks Down on Unfiled Returns: 1.52 Crore Individuals Targeted

editor — Mon, 15 Apr 2024 04:21:28 +0000

Large Discrepancy Between Taxpayers and Filed Returns

The Income Tax Department is launching a campaign to target individuals who haven’t filed their income tax returns (ITR) despite meeting filing requirements. According to a report in the Economic Times, the department has identified 1.52 crore such individuals.

Data Discrepancies Trigger Action

This initiative stems from a data analysis by the Central Board of Direct Taxes (CBDT) which revealed a significant gap between the total number of taxpayers (8.9 crore in financial year 2022-23) and the number of ITRs filed (7.4 crore, including revised returns). This suggests that potentially 1.97 crore individuals might not have filed their returns even though tax was deducted at source (TDS) from their income.

Focus on High-Value Transactions

The I-T Department is particularly interested in individuals with high bank transactions linked to their PAN cards. Officials will be contacting these individuals to explain the importance of filing ITRs. Additionally, the CBDT has identified nearly 9,000 potential taxpayers who might have made high-value purchases or cash deposits and will be sending them tax notices.

Consequences for Non-Compliance

Individuals who deliberately neglected to file returns will face penalties. However, those with genuine reasons for the sudden increase in income can submit an explanation or file a return to rectify the situation.

Data Analytics Boosts Tax Collection

The Income Tax Department’s access to a vast amount of data has proven instrumental in identifying non-filers and uncovering inconsistencies. This focus on data analysis is credited with contributing to a significant rise (19.88%) in net direct tax collection, exceeding ₹18.90 lakh crore as of March 17th.

Source: https://www.hindustantimes.com/business/it-department-to-tap-1-52-crore-individuals-for-income-tax-return-filing-heres-why-101713003056572.html

category

Income tax department cracks down on PAN fraud for false HRA claims

editor — Wed, 03 Apr 2024 06:34:13 +0000

The income tax department has unearthed a scam involving the fraudulent use of permanent account numbers (PAN) to claim house rent allowance (HRA) without actual tenancy. Around 8,000-10,000 high-value cases, each involving amounts exceeding Rs 10 lakh, have been identified so far. The investigation was triggered by the discovery of alleged rent receipts totaling approximately Rs 1 crore attributed to an individual.

Uncovering the deception

Upon interrogation, the individual associated with the PAN linked to the purported “rental income” disavowed any knowledge of the transactions. Subsequent investigations revealed that the individual never received the reported rent payments.

Widespread misuse of PANs

The case prompted a broader probe revealing widespread misuse of PANs by unscrupulous individuals seeking tax deductions from their employers. Instances have emerged where multiple employees from the same company used identical PANs for tax claims. Tax authorities are pursuing these employees to recover the misappropriated tax amounts.

Legal implications and preventive measures

While legal action against the offenders remains uncertain, tax experts warn of potential penalties and prosecution for such fraudulent activities. To prevent such misuse, financial transactions, particularly rent payments, should be traceable and transparent, preferably through electronic means. Employers are advised to implement stringent verification processes to prevent fraudulent claims and to ensure compliance with tax regulations.

Expert insights and employer responsibilities

According to tax advisors, the responsibility primarily rests with the employee, although employers are urged to exercise due diligence in verifying HRA claims. Employers found to have lax verification processes risk reputational damage and may even terminate employees engaged in fraudulent practices.

The case underscored the imperative for vigilance and compliance in financial transactions, particularly in the realm of taxation, to prevent and penalize fraudulent activities.

Source: https://www.indiatvnews.com/business/income-tax/income-tax-department-cracks-down-on-pan-fraud-for-false-hra-claims-house-rent-allowance-authorities-rental-income-financial-transactions-2024-04-01-924080

category

Investigation of Large Corporations and Multinational Companies under GST Requires ‘Formal Authorization’

editor — Tue, 02 Apr 2024 07:46:09 +0000

The Department of Revenue has issued directives to CGST officials regarding the initiation of investigations into cases involving prominent industrial entities and multinational corporations (MNCs). These guidelines aim to streamline procedures and ensure uniformity in enforcement activities while maintaining the ease of doing business.

These guidelines outline specific scenarios where written approval from the zonal Chief Commissioner is necessary before initiating an investigation or taking action. These include cases involving large corporates, major MNCs, matters already under consideration by the GST Council, or matters seeking to impose taxes or duties on a sector, commodity, or service for the first time under Central excise or GST.

The precise definition of ‘big industrial house’ and major MNCs under these guidelines remains unclear to tax experts. Additionally, the guidelines require CGST field formations to gather details on prevailing trade practices and transaction nature from stakeholders in such cases, ensuring sufficient justification for initiating investigations and actions.

This uniform procedure was introduced following discussions by the Central Board of Indirect Taxes and Customs (CBIC) on the necessity for standardized enforcement procedures by CGST field formations, particularly concerning regular taxpayers and their impact on the ease of doing business.

Furthermore, tax officials are instructed to confirm whether any ongoing inquiries relate to the same subject matter or taxpayer by another investigating office or tax administration. This information must be presented to the authority responsible for approving the investigation’s initiation.

Experts believe that the directive addresses industry concerns, emphasizing the importance of effective implementation to promote tax certainty and stability in the business environment.

Source: https://www.thehindu.com/business/Economy/now-gst-probe-into-big-corporates-major-mncs-needs-a-written-approval/article68013343.ece

category

Implications of Non-Compliance with GST Return Filing under Section 62 of CGST Act

editor — Tue, 26 Mar 2024 08:02:30 +0000

The Goods and Services Tax (GST) regime, implemented in India in 2017, mandates registered taxpayers to regularly file returns to declare their taxable supplies and corresponding tax liabilities. However, failure to comply with this obligation can lead to significant consequences under Section 62 of the CGST Act.

Understanding Section 62 of CGST Act:

Subsection (1):

Non-Filing Obligations: This subsection comes into effect when a registered taxpayer fails to file the prescribed return under Section 39 (monthly return) or Section 45 (annual return), even after receiving notice under Section 46.
Authority of Proper Officer: The designated official empowered by the government can assess the tax liability in the absence of a return by estimating it to the best of their judgment, based on available or gathered information.
Assessment Order Issuance: The officer issues a formal assessment order (Form GST-ASMT 13) determining the estimated tax liability, interest, and any applicable penalties.
Time Limit: The assessment order must be issued within five years from the due date for filing the annual return for the relevant financial year.

Subsection (2):

Rectification Opportunity: Taxpayers have a chance to rectify non-filing by submitting a valid return within 30 days of receiving the assessment order, leading to the withdrawal of the order.
Continued Liabilities: Even if the assessment order is withdrawn, the taxpayer remains liable to pay interest and late fees as per Section 50(1) and Section 47 of the CGST Act, respectively.

Additional Provisions:

Penalties under Section 62 of CGST Act:

Interest: Interest is levied on the assessed tax liability as per Section 50(1) of the CGST Act.
Late Fees: Additional late fees are charged under Section 47 for each day of delay in filing the return.
Potential Prosecution: Severe cases of non-compliance may lead to criminal prosecution under Section 132 of the CGST Act.

Consequences of Non-Compliance under Section 62:

Key Points of Section 62:

Applicability: Applies to registered persons failing to file returns under Section 39 or Section 45.
Assessment by Proper Officer: The officer estimates tax liability based on available information within a specified time frame.
Time Limit for Assessment: Assessment can be initiated within five years from the due date for furnishing the annual return.

Relief for Non-Filers:

Conclusion:

Section 62 of the CGST Act serves as a deterrent against non-filing of GST returns, empowering authorities to assess tax liability and impose penalties. However, it also provides an opportunity for rectification within a stipulated time frame, albeit with certain consequences. Taxpayers are strongly advised to adhere to prescribed deadlines to avoid unnecessary assessments, penalties, and legal complications.

category