Centre looks to plug GST leaks
News item in TOI
“Having detected frauds of close to Rs 50,000 crore, the Centre is looking to tighten processes, including those related to claiming input tax credit, and will focus on getting states to okay plans to plug leaks and evasions at this week’s GST Council meeting.
On an average, businesses pay 20% of their tax in cash and pay the remaining using the tax credit accumulated in their accounts.” Therefore 80% of tax amount is claimed as tax credit. What this means that when GST collection is One Lakh crore then Input tax Credit claimed is four Lakh crore.
Government should remove the root cause of such massive fraud i.e. provision of Input Tax Credit in GST Act. Actual fraud not detected may be much more than Rs. 50000 crore.
We request government to abolish the provision of Input Tax Credit now. The original purpose of getting maximum number of businesses to register under GST has been fulfilled.
Removing input tax credit means that government should reduce GST rates on all goods and services so that ensure that GST burden on end consumer is reasonable and affordable.
Apart from eliminating frauds removal of input tax credit will simplify the life of businessmen and only a single return needs to be filed in place of multiple returns and invoice matching to claim input tax credit. This will also reduce corruption on account of refund of input tax. more
“Having detected frauds of close to Rs 50,000 crore, the Centre is looking to tighten processes, including those related to claiming input tax credit, and will focus on getting states to okay plans to plug leaks and evasions at this week’s GST Council meeting.
On an average, businesses pay 20% of their tax in cash and pay the remaining using the tax credit accumulated in their accounts.” Therefore 80% of tax amount is claimed as tax credit. What this means that when GST collection is One Lakh crore then Input tax Credit claimed is four Lakh crore.
Government should remove the root cause of such massive fraud i.e. provision of Input Tax Credit in GST Act. Actual fraud not detected may be much more than Rs. 50000 crore.
We request government to abolish the provision of Input Tax Credit now. The original purpose of getting maximum number of businesses to register under GST has been fulfilled.
Removing input tax credit means that government should reduce GST rates on all goods and services so that ensure that GST burden on end consumer is reasonable and affordable.
Apart from eliminating frauds removal of input tax credit will simplify the life of businessmen and only a single return needs to be filed in place of multiple returns and invoice matching to claim input tax credit. This will also reduce corruption on account of refund of input tax. more
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When Govt detects a lacuna after implementation of GST they should try to correct it and make life easier of the affected parties. more
Sep 20
Corruption Controls of this GOI set rights all. JUDICIARY TO SUPPORT more
Sep 20
ITS ABANDANT USAGE RFFECTS ON Economy ; Environment ; Road Safety ; increase of Vehicles making Scrap A BIG PROBLEM . ALL together needs reduction of these DIVERSIFYING TOWARDS ELECTRIC POWER BASE more
Sep 19
Mr. Pande, what happened about your appeal on GST removal for Coop societies? Any success in that? more
Sep 17
If you observe carefully what happens when you purchase a pack of Biscuit from a small shop who does not think of paying GST in their dreams - you are paying MRP. You being an individual - you are also not within the scope of GST - but, that MRP is GST included - do you know that? But, that shop never deposits GST - their total yearly sales is well below 20Lakhs !
So, it is meaningless to think that the poor common man will not pay GST - you are paying someway or other.
Then, why not we accept that everyone must pay GST all the time (when it is actually happening?) - that will provide a different situation to the states and Central GST authority to plug leaks and give proper benefit to the needy.
We must change our attitude to appeal and get exemption - this attitute is causing trouble to implement something better. more
So, it is meaningless to think that the poor common man will not pay GST - you are paying someway or other.
Then, why not we accept that everyone must pay GST all the time (when it is actually happening?) - that will provide a different situation to the states and Central GST authority to plug leaks and give proper benefit to the needy.
We must change our attitude to appeal and get exemption - this attitute is causing trouble to implement something better. more
Sep 18
Businesspeople used to cheat by collecting ST and not depositing it to the government by various ways. The same is bound to happen with GST too. Even with computerisation, billions of transactions everyday recorded at different times using different computers will give rise to a lot of inconsistent records and the time and manpower required to reconcile them and isolate shady transactions will be considerable. Unless all the transactions are entered by every business in real-time networked mode to generate invoices and accept payments, the possibility of mismatched data cannot be resolved, but the computing and network resources required will be very considerable and 100% availability at the server, network and client systems will be difficult to achieve. Government has proposed real-time e-invoicing for B2B transactions and we have to wait and see how successful it will be. But what about the retail sales? I am sure our innovative business people will work out some way of cheating using bogus off-book invoices and will present tax inspectors with some good opportunities for carrying on business as usual. The individual amounts may not be impressive but taken as a whole, it will create a lot of unaccounted wealth for everybody concerned. more
Sep 17
I believe that GST Leakage has happened because Govt does not allow to enter the purchase details on GSTN site or GST3B and there is no way to match the seller's invoice with Buyer's details, whether Tax was deposited by the seller or not. Once Purchase details are also made mandatory to upload, and BI (Business Intelligence) programs are written to verify each and every invoice of a seller with Purchase details uploaded by the Buyer (assuming B2B) - this problem of leaking will also get solved. There are other sources of Leakage too - let us consider the following questions - Q1.1. What is the document (Invoice or delivery challan) used to transfer material from a seller store to e-commerce operator store ? What process is followed in actual practice? Q1.2. There is no section in GSTR1 which tracks this stock transfer to e-commerce operator / "Intent-to-Sale" Q1.3. As per time-of supply rule - does the seller pay GST at the time of transfer to the e-commerce operator's store? Q2.1. The e-commerce operator issues a GST invoice to the buyer - does the e-commerce operator submits that tax to the Govt in favor of the seller? Q2.2. If NO, does the seller again prepare a self-invoice to submit the tax to the Govt after adjusting what was already paid at the time of stock transfer to the e-commerce operator? Q2.3. If yes, how does the seller adjusts the Tax with what they already paid at the time of stock transfer to the e-commerce operator? Composition Dealers - This is another big GST leakage. A regular GST dealer - assuming 40Lakhs yearly Sales (Taxable value) of Items having 18% GST - pays a GST of 7.20 Lakhs How much does the Govt get from the Composition Dealer for the same transaction? Only Rs.40,000/- only Hope pleasing will stop in favor of the country and Leakage will be plugged. more
Sep 17
Business Supporters DEMANDED DILUTION OF GST Returns. GOI MUST BE STRICT in Analysing Qty based Value of SALES AND PURCHASES.
Most important is that JUDICIARY SHALL UPHOLD CORRUPTION CONTROLS PROPOSED realizing National interest that shall overrule individual Secrecy/ Privacy.
NATIONAL INTEREST SHALL BE THE GOAL OF JUDICIARY ALSO. more
Most important is that JUDICIARY SHALL UPHOLD CORRUPTION CONTROLS PROPOSED realizing National interest that shall overrule individual Secrecy/ Privacy.
NATIONAL INTEREST SHALL BE THE GOAL OF JUDICIARY ALSO. more
Sep 17
