GST authorities summon firms with 12 key docs for scrutiny, industry wary
Central GST authorities have started summoning businesses with a set of 12 key documents pertaining to FY17-18, the GST roll-out year, for closer scrutiny suggesting an aggressive approach against suspected tax evasion.
 
This has left the industry scared with many of them terming the move arbitrary. Many tax experts pointed out that several records called by the department are already with them and hence, such a demand is unreasonable.
 
Industry sources said that records called by the central GST authorities include various GST returns (GSTRs), GST registration certificate, copies of annual report, Income Tax returns, reports of cost, tax and internal audits, cash ledger and work orders, among others.
 
Bipin Sapra, partner at EY, said that GST audits are being ordered even where GSTR 9C has been submitted and the GST authorities have reconciliations of the financial data and tax paid.
 
"The audit should be based on queries if any on the basis of returns already filed. The information sought is elaborate and is available with the authorities. Given that most big units have multi state registrations, it will be an epic task to get the audit done in all the states for each year. There needs to be a centralised audit of these records to avoid undue hardship and promote ease of doing business in India," Sapra told IANS.
 
With pressure mounting on the field officers for higher GST collection, there has been more focus on curbing GST evasion and leakage. This week, the Revenue Department held a meeting with senior GST officials from both Centre and states and drew up a nine-point strategy to plug loopholes in the system.
 
Archit Gupta, Founder and CEO, ClearTax, said that government has been taking an aggressive stand against taxpayers.
 
"However, both government and the taxpayers should place increasing reliance on the systems data and use technology to improve compliance. Harassing taxpayers comes with limited benefits, but using technology for both compliance and audit is beneficial. The government will soon implement rules to make sure provisional ITC credit does not exceed 10 per cent.. this will leave taxpayers with no choice but to use technology for reconciling their data for ITC purposes," Gupta said.
 
With many states opposing the idea of rate increase to augment GST revenue, the government has directed its focus on anti-evasion measures. From April this year, e-invoicing would be implemented for certain categories of businesses.
 
Vivek Jalan, Partner, Tax Connect Advisory Services LLP said that the root cause of the notices is the directions given by the Commissionerate and CBIC to the field formations for going all-out on GST scrutiny.
 
Further, such directions have given field officers the opportunity to take arbitrary actions.
 
Jalan said that lower GST collection was not the only result of evasion but more of the lower GDP growth and the record-low consumption level.
 
"The higher GST collection will not happen in this way (sending notices to taxpayers). There has to be higher GDP growth and consumption growth to mop up more revenue," the tax expert said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Sudhir Mankodi

    8 months ago

    If the trading community has nothing to hide, why they should feel \"scared\" about the directive? It\'s a well known fact that those who are supposed to pay higher tax, they engage the services of the consultants (like the one who has been quoted in your report) to find loopholes to evade the tax. Afterall, govt. is expected to generate the revenue. If they seek clarifications what\'s wrong? Only the service class has to hear the brunt of dishonesty of the trading community by paying higher taxes?

    gcmbinty

    8 months ago

    Indian trading community under suspect. Indirectly, failure of the capitalist regime without without acceptable procedures of collecting taxes. GST rates are exorbitant and the open market theory of "Price Mark Up" and encouraging the retailers/vendors on the road to demand any price from the consumer has failed the RSS backed economics of the BJP.

    CBDT Releases ITR forms in advance, seek foreign travel, passport details
    In a very fast move and a New Year surprise, the Central Board of Direct Taxes (CBDT) has notified income tax returns forms for the financial year (FY), which normally come in April, well in advance in January itself.
     
    The CBDT has issued two forms-ITR-1 and ITR-4 for the AY 2020-21. There are two major changes in the ITR Forms on house property.
     
    An individual taxpayer cannot file return either in ITR-1 or ITR4 if he is a joint owner in house property and the ITR-1 form is not valid for those individuals who have deposited more than Rs 1 crore in their bank account or incurred Rs 2 lakh or Rs 1 lakh on foreign travel or electricity, respectively.
     
    Some of the changes in new ITR 4 Sugam AY 2020-21 are that if having the tax-payer has a passport, its number is to be given. On incurring aggregate expenses exceeding Rs 2 lakh on foreign travel for self or for others, then the amount has to be specified.
     
    In addition, if any person has deposited an aggregate amount exceeding Rs 1 crore in one or more current accounts, then the aggregate of the amount deposited in all such accounts has to be specified.
     
    If an amount exceeding Rs 1 lakh has been spent on electricity consumption, then the aggregate amount has to be specified.
     
    An important change in new ITR related to disclosure related to cash in case of presumptive tax assesses.
     
    In case of 44AD or 44ADA or 44AE, now the assessee will be required to give opening balance of cash in hand and opening balance of bank accounts and also will be required to give the total amount received in cash during the year, the total amount deposited in bank during the year, the total amount of cash outflow out of cash balance during the year, the total amount of withdrawal from the bank during the year and closing balance of cash in hand and closing balance in banks.
     
    However, now there will be no need to provide figures of unsecured loans, sundry debtors, sundry creditors, amount of closing stock, etc. as was required in earlier years.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Deepak Narain

    8 months ago

    It is not clear whom the Forms of 44 series will be applicable. The new IT Forms are also not given.

    Ramesh Poapt

    8 months ago

    most people have joint name property for convinience. what is the logic for this change? there may b some cut-off value?

    REPLY

    Meenal Mamdani

    In Reply to Ramesh Poapt 8 months ago

    I suppose the logic is to identify those people who are avoiding taxes by hiding their wealth under various guises.

    The IRS Tried to Crack Down on Rich People Using an “Abusive” Tax Deduction. It Hasn’t Gone So Well.
    The US tax agency, Justice Department and Congress have all taken aim at a much-abused deduction exploited by wealthy investors. Yet the crackdown is having minimal impact, costing the Treasury billions.
     
    In March 2019, the IRS added a scheme to its annual “Dirty Dozen” list of “the worst of the worst tax scams.” That same scheme was targeted, just weeks earlier, when the U.S. Department of Justice filed a fraud lawsuit against a handful of promoters allegedly responsible for generating more than $2 billion in improper tax write-offs. And the Senate Finance Committee has been investigating that very same racket, recently demanding thousands of pages of documents from six promoters. Lawmakers from both parties have introduced legislation to halt the same practice.
     
    The scheme they’re all trying to kill is what’s called a “syndicated conservation easement,” which the IRS calls “abusive” and says has resulted in bogus deductions for the rich that have cost the U.S. Treasury billions in revenues.
     
    A conservation easement, in its original, legitimate form, is granted when a landowner permanently protects pristine land from development. In that scenario, the public enjoys the benefit of undeveloped land and the taxpayer gets a charitable deduction. By contrast, the syndicated form, created and packaged by profit-seeking middlemen known as “promoters,” involves buying up land, finding an appraiser willing to declare that it has huge development value and thus is worth many times the purchase price, then selling stakes in the deal to wealthy investors who extract tax deductions that are often five or more times what they put in. (ProPublica investigated syndicated easements in the 2017 article The Billion-Dollar Loophole.”)
     
    But the multifront crackdown seems to be having, at best, a limited effect. There were signs that the pace of syndicated deals has eased, according to an IRS letter to Congress in July 2018 that cited incomplete data; that’s the most recent official statement from the agency, which declined to comment for this article. And some entities doing syndicated projects have seen their business drop or have even left the field. But IRS commissioner Chuck Rettig offered a different picture to the Senate Finance Committee this spring. “Syndicated transactions have absolutely not declined,” he testified. “They’re still there.”
     
    In November, Rettig announced an escalation — including the launch of criminal investigations — in the agency’s attempts to stymie syndicated easements. “We will not stop in our pursuit of everyone involved in the creation, marketing, promotion and wrongful acquisition of artificial, highly inflated deductions based on these aggressive transactions,” he said in a statement at the time. Three IRS divisions are now conducting coordinated examinations of syndication deals after identifying 125 “high-risk cases,” and outside contractors have been hired to assist with the investigative load. More than 80 tax court cases are now pending against partnerships that used the syndicated easement deduction.
     
    The imperviousness of the scam’s promoters and investors has left tax experts flummoxed. “Boy, it isn’t like the old days, when people were fearful of the IRS,” said Steven Miller, who oversaw enforcement and tax-exempt organizations during his 25 years at the IRS and is now national tax director with consulting firm Alliantgroup. “I’m worried people aren’t afraid of the cop on the beat any more.”
     
    Another IRS veteran offered a similar view. “I thought by now they would have put these guys out of business,” said former agency commissioner John Koskinen, who took steps against syndicated easements before he left in late 2017… Continue Reading
     
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