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Current Affairs

GST collection

  • In FY19 there is a shortfall of nearly Rs 35,000 crore in direct tax revenue, a larger deficit of Rs 60,000 crore in GST. Centre made savings to the tune of Rs 14,000 crore under the PM-Kisan. The massive tax revenue deficit must have forced it to cut expenditure. Total GST collections for February (collected in March) stood at Rs 1,06,577 crore, the highest for any month since GST’s The Centre’s GST revenue in the year will be around Rs 5.79 lakh crore, against the RE of Rs 6,43 lakh crore. A relief will come to the Centre in the form of not having to spend some Rs 40,000 croresurplus accrued in the compensation cess fund.
  • On a monthly average basis, GST collections in FY19 grew 9.2%, lower than the nominal GDP growth of 11.5%, while GST is settling on a quarterly basis, GST collections’ growth in Q4FY19 increased to 14.3% from 12.1% in QF3Y19.
  • Goods and Services Tax(GST) is an indirect tax (or consumption tax) imposed in India on the supply of goods and services. The tax rates, rules and regulations are governed by the GST Council which consists of the finance ministers of centre and all the states.

Big mismatch in ITR

  • There has a mismatch of Rs12 lakh crore detected by INDIRECT TAX DEPARTMENT between the income declared in income-tax returns on account of services and the value of these services declared in the corresponding service tax details in FY16. The declared amounts were detected on the basis of permanent account number of ITR filers. Mismatch amount is nearly 6 times the service tax collected in the fiscal and also the reason for the shortfall in GST in FY18 & 19. Now it has and this makes the exercise for the GST period a more accurate.

GST evasion in Gujarat

  • The Goods and Service Tax (GST) department has registered over 1,470 cases of tax evasion in the financial year 2018-19 and recovered around Rs 360 crore in Gujarat. A senior official in the state GST department said that the authorities had also arrested 14 businessmen for tax evasion. Traders bought fake bills which enable them to claim input tax credit on the supply which in reality never happened. Input tax credit is an option in the GST which allows the taxpayers to claim credit for the taxes paid on inputs, he added.
  • The biggest case of evasion was registered at Gondal town in Rajkot district after the authorities unearthed a fake billing racket of nearly Rs 470 crore. In another cases, the officials arrested five persons from Ahmedabad and others from the Bhavnagar, Vadodara and Deesa respectively. In order to curb GST theft, mobile squads have been formed by the state GST department.

CBDT on DeMo Cases

  • CBDT has instructed its officials to”dispose of all cases related to demonetisation where assessment is required to be framed till June 30.
  • It had sent out notices and emails to about 3 lakh people who had made high-value cash deposits in the days following the demonetisation announcement of November 8, 2016, but had not filed their I-T returns.
  • The CBDT action plan, which will be in play until the department charts out the full-year outline, also aims to issue notices to non-filers of Statement of Financial Transactions (SFTs) under Section 285 BA of the Income-Tax Act by May 15 this year. Under the provision, specified entities such as banks and mutual funds have to report and file Annual Information Returns of individuals carrying out high-value transactions.

Form16, Form 24Q

  • CBDT has notified amendments in
    • Form 16: acts as certificate for tax deducted at source
    • Form 24Q: quarterly TDS statement for salaries.
  • The new forms require taxpayers to provide more details related to bifurcation of exemptions under Section 10 of the Income Tax Act, various deductions under Chapter VI-A, disclosure of standard deduction amount and other income. These specific disclosure would make it easier for tax authorities in understanding a taxpayer’s salary components, facilitating more precise scrutiny.

Circular trading & GST evasion charges

  • The indirect tax department that had arrested many promoters, after the notice issued in February for circular trading and escaping goods and services tax may have to rethink its strategy after the Mumbai High Court granted bail to many of them. The tax department raided premises of several companies for allegedly inflating turnover through fake invoices to shell companies.

Higher import duty sought on Chinese leather, footwear

  • Industry has raised alarm bells as imports of finished leather goods and footwear from China have increased amid falling exports of these products from India. Even though India is a net exporter of raw hides and skins to China, it is a net importer of footwear and other articles of leather such as handbags, saddler and harnesses from its neighbor. China is the fifth largest importer of leather and leather products in the world.
  • Import duty is a tax collected on importsand some exports by a country’s customs authorities. A good’s value will usually dictate the import duty. Depending on the context, import duty may also be known as a customs duty, tariff, import tax or import tariff.

GST e-invoice generation system

  • GST officers are working on a system where businesses above a certain turnover threshold will have to generate ‘e-invoice’ on government or GST portal for every sale, thereby effectively reducing the room for tax evasion.
  • To start with, businesses above a specified threshold will just get a unique number for every electronic invoice or e-invoice generated, this number can be matched with the invoices reported in the sales return and taxes paid, an official said.
  • The official said that businesses beyond a turnover threshold would be provided a software which will be linked to GST or a government portal for generating e-invoice
  • The proposed system of e-invoice will eventually replace the requirement of generation of e-way bill for movement of goods, as invoices would be generated through a centralized government portal.