CBIC issues 33,000 notices for GST return Discrepancies in FY18, FY19

GST return Discrepancies GST return Discrepancies : CBIC officials have issues notices to 33,000 businesses from central tax officers for errors in their 2017–18 and 2018–19 tax returns and underpayment of taxes.

The Revenue Secretary will likely chair the National Coordination Committee of State and Central GST officers by the end of this month or early January. One of the committee’s goals will be to raise awareness among tax officers about the issuance of notices, among other things, the official stated.

The notices sent for 2017–18 and 2018–19 were a “small percentage” of the total returns filed for the two fiscal years, according to Central Board of Indirect Taxes and Customs (CBIC) Member–GST Shashank Priya, who was speaking at the National Conference on GST.

The extension of the deadline for taxpayers to file their annual returns for the two years, he said, was another reason for the grouping of demand notices. The July 1st, 2017 implementation date of the Goods and Services Tax (GST).

Read also: GST notices – AI generated to thousands of taxpayers sent

For the 2017–18 fiscal year, the deadline for submitting annual returns was extended to February 7, 2020; for the 2018–19 fiscal year, it was extended to December 2020.

Every registered person is required by the GST law to file an annual return for each fiscal year by December 31 of the following fiscal year, at the latest. Consequently, December 31, 2023 is the deadline for filing an annual return for the fiscal year 2022–2023.

The deadline for filing returns was extended at the taxpayers’ request. As a result, officers have been under a lot of pressure to review the returns, even though they were filed late. Which is how we ended up in this sorry state of affairs. As we move forward, one hopes that this situation is resolved and that the proposed notices won’t all be pending at the same time. That is how things have happened for 2017–18, and we’ll see how best to handle it, Priya said.

Approximately 30,000–33,000 notices for underpayment of taxes have been sent by Central GST officers to GST-registered businesses, he stated.

“Through our interactions with the field formations, we hope to raise awareness among them about the need to put their officers on alert and to critically examine the information provided by the registrants in order to reach a decision and issue an order. To raise awareness among all tax administrations, I’m confident that we will discuss this matter at the National Coordination Committee meeting”, Priya added.

He claimed that it would be more advantageous for the tax administration and taxpayers if these disputes were settled at the adjudicating authority level as opposed to going to the GST appellate tribunal.

We are developing an automated scrutiny module that will provide clarity on the procedures to be followed and the types of issues to be examined in the return scrutiny, according to Priya.

The officer added that the GST appellate tribunal will be established within the next four to five months and that efforts are also being made to identify infrastructure, which will precede the commencement of the member selection process.

Regarding preventing phony GST registrations, Priya stated that approximately 25–28% of registered businesses were discovered to be fraudulent in several tax administrations.

Read also: Indian companies face GST demand notices for claiming blocked credits

He said, “We are investigating ways to tighten the registration even more. We are also considering how we can make the GSTR-3B (monthly GST payment form) less and less amenable to changes.”

During a two-month special drive from May 16 to July 15, 2023, to weed out bogus registrations, the Central and State GST officers found 21,791 fake GST registrations and over Rs 24,000 crore of suspected tax evasion.

It was found that 21,791 entities with GST registration—11,392 entities under state tax jurisdiction and 10,399 entities under CBIC jurisdiction—were non-existent. During the special drive, suspected tax evasion totaling Rs 24,010 crore (state: Rs 8,805 crore + Centre: Rs 15,205 crore) was found, Finance Minister Nirmala Sitharaman told the Parliament.

At its most recent meeting on April 24, 2023, the National Coordination Committee of the State and Central GST officers decided to start a special drive to find suspicious or fake GSTINs, perform the necessary verification, and take further corrective action to remove these fake billers from the GST eco-system and protect government revenue.

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