The CBIC official mentioned that approximately 33,000 GST notices have been dispatched by central tax officers to businesses due to inconsistencies in filed returns and underpayment of taxes during the financial years 2017-18 and 2018-19.
Additionally, the official mentioned that the National Coordination Committee, led by the Revenue Secretary, is expected to convene by the end of this month or early January. Among its agenda items, the committee aims to educate tax officers about the process of issuing GST notices.
Speaking at the Assocham National Conference on GST, Shashank Priya, Member-GST of the Central Board of Indirect Taxes and Customs (CBIC), noted that the notices sent for the fiscal years 2017-18 and 2018-19 constituted only a “small percentage” of the total returns filed during those years.
Shashank Ji highlighted that the clustering of demand notices was influenced by the extension of the deadline provided to taxpayers for submitting annual returns for those two years. The Goods and Services Tax (GST) was introduced on July 1, 2017.
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The deadline for filing annual returns for the fiscal year 2017-18 was extended until February 7, 2020, while for 2018-19, it was prolonged until December 2020.
As per GST regulations, every registered individual must file an annual return for each financial year by December 31 of the subsequent financial year. Accordingly, the deadline for filing the annual return for the 2022-23 fiscal year is December 31, 2023.
Shashank Ji mentioned that the extension of return filing time, as requested by taxpayers, led to delayed filings, adding pressure on officers to scrutinize returns. Unfortunately, this has resulted in the current situation. Hopefully, as we move ahead, we can avoid having a backlog of proposed notices simultaneously. This situation occurred in 2017-18, and we’re working on strategies to address it.
He stated that Central GST officers have issued approximately 30,000-33,000 notices to GST-registered businesses for insufficient tax payments.
Shashank Ji expressed, During our discussions with field formations, we aim to sensitize them about the importance of thoroughness in examining registrants’ details, documents, and facts before reaching conclusions and issuing orders. This issue will be a key agenda item in the upcoming National Coordination Committee meeting to ensure all tax administrations are well-informed.
He highlighted that resolving these disputes at the adjudicating authority level instead of going to the GST appellate tribunal would be beneficial for both tax administration and taxpayers.
We’re developing an automated scrutiny module to provide clarity on the scrutiny process and the specific issues addressed during return examinations, Shashank Priya explained.
Moreover, the officer mentioned plans to establish the GST appellate tribunal within the next 4-5 months. Efforts are underway to identify the necessary infrastructure, followed by the initiation of the member selection process.
Concerning curbing the bogus registration under GST, Shashank Priya mentioned in various tax administrations 25-28 per cent of the businesses registered were revealed to be fake.
We’re exploring ways to tighten the registration process further. We aim to reduce the scope for alterations in the GSTR-3B (the monthly GST payment form), he stated.
During a targeted two-month drive from May 16 to July 15, 2023, Central and State GST officers uncovered 21,791 fake GST registrations, potentially linked to over Rs 24,000 crore in suspected tax evasion.
Out of these, 21,791 entities were found to have non-existent registrations, split between state tax jurisdiction (11,392) and CBIC jurisdiction (10,399). This led to the detection of suspected tax evasion amounting to Rs 24,010 crore (Rs 8,805 crore from state jurisdiction and Rs 15,205 crore from the Centre), Finance Minister Nirmala Sitharaman informed the Parliament.
The decision to conduct this special drive was made during the previous meeting of the National Coordination Committee of State and Central GST officers held on April 24, 2023. The primary objectives were to identify suspicious or fake GSTINs, carry out necessary verifications, and take corrective measures to eliminate these fraudulent entities from the GST system, thus protecting government revenue.
