Govt blocks Rs 40,000 Cr GST claims on returns mismatch
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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.
There have been multiple ways in which frauds have been taken place. Sources said, the department had collected data on mismatch of over 20% in the initial GSTR-1 filing for the month and the final GSTR-3B returns. Subsequently, the bar was lowered to a difference of 10% and the government used various red flags to then identify companies, while completely relying on data instead of sending tax inspectors to premises to check for books.
The standard operating procedure developed by the revenue department is to share the data with the state governments, which then move in, first asking them to make the corrections or pay up.
But the scrutiny of the data has revealed that several flyby-night operators were misusing the benefit. There were entities which were set up just for the sake of showing bogus turnover and relied on a web of shell companies. These companies, many of which used forged documents, then vanished from the scene, prompting the government to tighten norms for GST registration. #casansaar (Source - TNN - Times of India)
Fraudulent इनपुट पे सरकार का वार!!! Fake Supplier खबरदार .
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