The government has identified hundreds of fake companies taking input tax from the government in the name of the goods and services tax (GST). Now the government is set to take action against them. These companies besides taking the input credit from the government in a fraudulent way, also help other companies in stealing GST.
According to officials associated with the indirect tax, the concern of the government is on the matter that liability of input credit is increasing continuously while that ratio is not being collected by GST. At the same time, businessmen are not paying their income tax returns according to GST return, so the direct tax is not being increased as expected. GST collection has also decreased in May this year as compared to April month.
Many companies are recovering input credit in the name of fake export
According to indirect tax department sources, many companies are collecting input credit in the name of fake export. These companies show the import of raw materials in very large quantities. Apart from this, such companies with the support of foreign companies export goods made from substandard goods and in the name of it, are collecting input credit in huge quantity. These firms or companies include many domestic traders in this chain of fraud and join them in GST theft.
Such hundreds of firms have been identified and now serious action is being taken against them. According to sources, hundreds of companies claiming inputs in the name of GST are such that they showcase GST returns as a considerable amount of money while their IT returns comparatively is much less. In such a situation, the government’s income becoming less while expenditure getting higher.
Notice has been issued to fraudulent companies and firms
According to the department sources, the government can arrest the owners of such companies or those who did forgery in the name of GST. Recently, the Central Government filed a petition in the Supreme Court challenging the High Court’s decision on the arrest of GST theft case.
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The Center argues that in this case, GST Commissioner has the right to arrest the accused without FIR. The Supreme Court has also agreed to the Center in this matter. According to sources, a notice has been issued by the government to companies and firms who are involved in forgery based on the GST.
GST collection in May this year stands at Rs 1,00,289 crores
According to official data, the GST collection in May this year accounts Rs 1,00,289 crore, which is more than Rs 6,273 crore against the collection of Rs 94,016 crore in the corresponding period of last year. But in the month of May, there is a low GST collection compared to April 2019. In May 2019, the government got a GST of 1.13 crore rupees. GST Revenue was Rs 1,13,865 crores in April 2019, in which central GST collection was Rs 21,163 crores (CGST), State GST (SGST) 28,801 crores, unified GST (IGST) 54,733 crores and cess collection was 9,168 crores.
