Govt blocks ₹40k crore GST claims on returns mismatch
Action Against 2K Entities For Alleged Fraud, Non-Filing
The Central Board of Indirect Taxes and Customs (CBIC) has frozen tax credits of around Rs 40,000 crore as the returns did not match, exposing alleged fraud by close to 2,000 entities, apart from cases where returns were not filed. Last week, the indirect tax wing of the revenue department blocked the credits within four hours, CBIC chairman John Joseph said at an event on Monday.
Companies are entitled to credits on tax paid on inputs in the production chain so that there is no cascading effect of taxes. But major discrepancies in returns and instances of a large number of frauds prompted the government to crack the whip.
We request government to remove root cause which allows such frauds i.e. Input Tax Credit. The intention to provide ITC was to prevent cascading of taxes, but in reality the benefit of ITC is not made available to end consumers by suppliers who are using ITC for profiteering.
Removing ITC will require GST rates to be lowered on inputs to ensure final GST burden on consumer is reasonable.
Removing ITC will make GST a Good and Simple Tax as was the intention expressed by PM. The frauds due to ITC will be avoided. Return Filing will become simple. There will be no need to do time consuming and cumbersome exercise of Invoice matching. more
The Central Board of Indirect Taxes and Customs (CBIC) has frozen tax credits of around Rs 40,000 crore as the returns did not match, exposing alleged fraud by close to 2,000 entities, apart from cases where returns were not filed. Last week, the indirect tax wing of the revenue department blocked the credits within four hours, CBIC chairman John Joseph said at an event on Monday.
Companies are entitled to credits on tax paid on inputs in the production chain so that there is no cascading effect of taxes. But major discrepancies in returns and instances of a large number of frauds prompted the government to crack the whip.
We request government to remove root cause which allows such frauds i.e. Input Tax Credit. The intention to provide ITC was to prevent cascading of taxes, but in reality the benefit of ITC is not made available to end consumers by suppliers who are using ITC for profiteering.
Removing ITC will require GST rates to be lowered on inputs to ensure final GST burden on consumer is reasonable.
Removing ITC will make GST a Good and Simple Tax as was the intention expressed by PM. The frauds due to ITC will be avoided. Return Filing will become simple. There will be no need to do time consuming and cumbersome exercise of Invoice matching. more
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Feb 22
Perhaps low one rate with no input credit may put an end to this misuse by corporates and there is wide spread under invoicing also more
Feb 02
The government and professionals may be engaged to find out the reasons for noncompliance.Many business man engage brokers to do all tax works and accounts works and this causes all problems. more
Feb 01
