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  1. GST alert: Companies start getting notices for mismatch in tax returns, underpayment; details here

GST alert: Companies start getting notices for mismatch in tax returns, underpayment; details here

GST officers have started sending scrutiny notices to companies whose tax payment did not match the final sales return, after revenue authorities detected underpayment of GST by about 34 per cent, a source said.

By: | New Delhi | Updated: May 6, 2018 7:45 PM
GST alert, tax returns, GSTR-3B, GSTR 2A, Arun Jaitley , news on gst, latest news on gst In one notice issued by Gujarat GST commissionerate on May 4, taxpayers have been asked to explain the reason for “discrepancies” in return GSTR-3B and GSTR-1 for October-December period by May 14.

GST officers have started sending scrutiny notices to companies whose tax payment did not match the final sales return, after revenue authorities detected underpayment of GST by about 34 per cent, a source said. Besides, companies whose final sales return GSTR-1 did not match GSTR-2A, which is a purchase return auto-generated by system from his seller’s return, have also received scrutiny notices. As per an analysis done by the revenue department in March, 34 per cent of businesses paid Rs 34,400 crore less tax between July-December while filing initial summary return (GSTR-3B).

These 34 per cent of the businesses have paid Rs 8.16 lakh crore to the exchequer by filing GSTR-3B, whereas analysis of their GSTR-1 data show that their tax liability should have been Rs 8.50 lakh crore. In one notice issued by Gujarat GST commissionerate on May 4, taxpayers have been asked to explain the reason for “discrepancies” in return GSTR-3B and GSTR-1 for October-December period by May 14.

“If no explanation is received by the aforesaid date, it will be presumed that you have nothing to say in the matter and proceedings in accordance with law may be initiated against you without making any further reference to you in this regard,” the notice said. Tax experts said that GST law provides for 30 days time to be given to taxpayers for replying to scrutiny notices, however, in the said case only 10 days time has been granted.

AMRG & Associates Partner Rajat Mohan said: “The government should issue strict guidelines for the officers to be reasonable and rational in disposing off the notice after giving the full opportunity of being heard to the tax payers. In one of such notice tax officer has given 10 days (out of which four days weekly off) against a maximum 30 day period allowed in rules”.

EY Partner Abhishek Jain said that the activity of data analytics at the end of revenue authorities has commenced with various players receiving notices, seeking clarifications on differences between GSTR-1 and GSTR-3B as well as GSTR-2A and GSTR-3B. While the reconciliation between GSTR-1 and 3B is to essentially verify payment of taxes for all outward supplies made, reconciliation between GSTR-2A and GSTR-3B is to ensure that credits claimed by businesses only pertain to taxes actually paid by the suppliers and there not being any loss to the government exchequer on this account, Jain said.

The government has collected over Rs 7.41 lakh crore as GST in last fiscal. However, there were concerns that due to absence of anti-evasion measures there might have been leakages in tax revenue. The GST Council, headed by Finance Minister Arun Jaitley and comprising state counterparts, had in its meeting in March decided to further analyse data gaps between self declared liability in GSTR-1 and the taxes actually paid while filing GSTR-3B. The revenue department has analysed the Goods and Services Tax (GST) returns data filed by over 51.96 lakh businesses during July-December, 2017.

The indirect tax reform GST was rolled out from July 1, 2017. The data analysis showed only 16 per cent of the summary sales returns under GST matched with the final returns till December 2017. It also showed that there was excess tax payment of Rs 91,072 crore by 49.36 per cent of businesses registered under GST between July-December. While they have paid Rs 6.50 lakh crore as GST, the GSTR-1 filed by them shows that their liability should have been Rs 5.59 lakh crore.

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  1. S
    Swapnil Bugde
    May 7, 2018 at 8:59 am
    This is not tax evasion or an attempt to evade tax. Implement the following, and then analyse the fresh data- 1. Open window for migration once again. 2. Allow resetting of filed GSTR 3B. 3. Drop late fees for all GSTR 3B up to March. 4. Allow the concessions from 1 to 3 for 3 weeks. Then, from the fresh data, try matching GSTR 1 with GSTR 3B and GSTR 3B with GSTR 2A.
    Reply
    1. Amarnath PD
      May 7, 2018 at 6:51 am
      There is nothing like simple tax system or complex one. What is absolutely lacking is honesty. Nowadays, people are ready to find loopholes in anything and everything and thus evade tax. Otherwise, in the same system, how statement of some companies are getting matched and some are not. After all, there is total lack of morals and fear of law and s sense of fearlessness coupled with brazen thought that you can anybody at some cost is spoiling the nation. Else, even after computerisation, there should be no mismatch.
      Reply
      1. T
        To my special w
        May 7, 2018 at 6:17 am
        All the so called wrong returns may not be due to evasion. It could be genuine errors due to complexity involved in understanding the law. Babus have this tend to think that everyone wants to evade tax. This is an opportunity for them to hound tax payers and make money. They themselves do not know the law properly.
        Reply
        1. U
          Upendra
          May 6, 2018 at 11:47 pm
          Babus started earning money also with this notices. Who knows to check in detail..settle by black money..
          Reply
          1. Ganesh Kamat
            May 6, 2018 at 9:05 pm
            TAX COMPLEXITY CREATED PROBLEMS NOT COLLECTION...??? >GET 18Cr New TAXPAYER...!!! 3xKITTY Daily. IF TAX 1 To ALL FOR 1st Rs.5Cr RECEIVED TAX Number MOBILE Number. PAY 1 No TAX RETURNS As 1-iTEM CHANGES HAND 18TIMES TAX COLLECTED 18 HOW? 1 BANK Transaction TAX >CASH PAY 1 of RECEIVED by MOBILE daily.
            Reply
            1. Ganesh Kamat
              May 6, 2018 at 9:00 pm
              TAX COMPLEXITY CREATED PROBLEMS NOT COLLECTION....?? >GET 18Cr New TAXPAYER 3xKITTY Daily. IF TAX 1 To ALL, FOR 1st Rs.5Cr RECEIVED TAX Number MOBILE Number PAY 1 No RETURNS....!! As 1-iTEM CHANGES HAND 18TIMES TAX COLLECTED 18 . HOW? 1 BANK Transaction TAX >CASH PAY 1 of RECEIVED by MOBILE daily.
              Reply
              1. Mruthyunjaya Siddalingaiah
                May 6, 2018 at 8:05 pm
                The main objective of introduction of GST is to catch the tax evaders. GST has a built in complex and multiple checks where in tax evaders can be tracked and punished. This is the main reason why business community has been creating confusion and alleging Modiji's government economic policies are stumbling s for growth of industry/ creation employment.Even there was opposition on demonetization because it can identify the s companies and track benami transactions. In fact it has achieved its objective and benami transactions using black money is under check.
                Reply
                1. U
                  Upendra
                  May 6, 2018 at 11:50 pm
                  You may be God to understand this gabbar Singh tax..even experts are struggling to understand..the officials starting earning money with these notices that's the summary. Ok now go and have good sleep
                  Reply
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