NEW DELHI: Tax authorities are grappling with a Rs 34,000-crore goods and services tax (GST) puzzle amid fresh fears in the government of businessmen evading taxes.
Preliminary analysis of returns filed between July and December with the GST Network has indicated that the scale of under-reporting of tax liabilities could be as much as Rs 34,000 crore.
The issue was flagged at Saturday’s GST Council meeting and notices may be issued to traders and businessmen who have shown different liabilities in GSTR-1, which is largely used for information purposes now, and GSTR-3B. The idea is to focus on those who have shown a wide variance in the two filings, a source told TOI. In many cases, details of the “suspects” will be shared with states for action after analysing details of individual taxpayers.
But this is not the only area of suspicion. However, filings data analysed by customs authorities has revealed that in several cases, the value of imported products was shown to be lower. For instance, the value of a mobile phone may have been shown as Rs 7,000 instead of Rs 10,000, an official explained. This was done to probably pay lower GST at every stage of sale process, authorities suspect.
GST collections have remained muted as the government has failed to implement several of the planned anti-evasion measures such as invoice matching to track the value of sales and purchases or e-way bills to keep tabs on movement of goods from factories to showrooms.
Officials said that the variation in the two returns was also detected as many businesses did not expect the government to tally GSTR-1 and GSTR-3B that includes detailed filing of payment based on input tax credit and use of previous balance.
Tax consultants, however, said that there could be valid reasons for the variation since at the time of payment of taxes, input tax credit accumulated over months is used, along with the current periods.
In contrast, such details are not provided while submitting GSTR-1, which is like a sales register with invoice details entered. A section within the Central Board of Excise and Customs too advised caution saying that there was a need to study the data more carefully as red flags had been raised in the past too but did not yield much result. “Physical copies of the returns need to be compared to ascertain the reasons for the difference,” said a senior officer. “The comparison of revenue figures from the returns filed would provide pointers to cases of under-payment of GST in terms of the increased focus on analysing the data patterns emerging from the various GST returns filed by businesses,” said M S Mani, partner at consulting Deloitte India.