CBIC detected 35000 GST returns with mismatch liability and input tax credit discrepancies

A senior tax official told BloombergQuint that the Central Board of Indirect Taxes and Customs has identified 35,000 GST filings from financial 2017-18 to examine for anomalies and mismatches in obligation, input tax credit, and other areas.

The cases were chosen for review based on “particular risk parameters,” as specified in a March department notification. The announcement established regular operational procedures for such scrutiny.

The GST was implemented in India for the first time in FY18, although only for nine months due to its introduction in July 2017. Because these returns will be time-barred by November 2022, the time for sending demand notices for submissions during this period is limited.

It does not mean that all of the instances under investigation are evasions; they could be filing errors, such as spelling mistakes, according to the tax official. The review process is likely to take six months and should not be expected to increase income, according to an official who spoke on the condition of anonymity because the specifics are not publicly public.

“The GST is a rather complex regulation in which various laws have been merged into one GST.” There have also been various adjustments and amendments since it was first launched in July 2017. “One expects that the agency would be sympathetic to taxpayers and will not take any major measures in the event of minor technological faults,” he told BloombergQuint.

Patnaik stated that this scrutiny process will be a litmus test for how litigation-free GST compliance will be, since it will focus on how field officers interpret and implement the government’s aim to keep legal conflicts to a minimal.

In recent months, GST compliance has improved as the administration has worked to close loopholes that allowed bogus claims of input tax credit. This has contributed to an increase in revenue. According to March data, the GST collection for February reached an all-time high of Rs.1.4 lakh crore.

“Compliance has obviously increased.” “As people are being questioned more frequently, taxes have risen as well,” said Bipin Sapra, a partner at consulting firm EY. In terms of the instances being investigated, Sapra told BloombergQuint that rapid resolution is critical.

The CBIC provides comprehensive instructions in its March notice “to maintain uniformity in the selection/identification of returns for scrutiny, methodology of scrutiny of such returns, and other related procedures.”

Field officers must verify the accuracy of the returns filed and notify the taxpayer of any discrepancies. If no sufficient answer is provided within 30 days, or more if allowed by the officer, appropriate action may be taken. For the remainder of the procedure, timetables have been established.

Source: BloombergQuint