The major issues which came into light during this probe are :
- Non-payment of taxes on such amounts which have been recovered through debit notes
- An excess claim of the Input tax credit and
- Transactions between plants and depots, which have been revealed as real transactions
The violation and breach of rules have not been estimated though there are instances where the suppliers have admitted for the pending tax liability and are making attempts and efforts for the payment of the same. They have been seen doing the initial payments. The GST Council has proposed a provision to the suppliers to get exempted from prosecution proceedings to get their taxes paid along with interest and a 15% penalty under the Central GST Act. This information has been given by a tax lawyer.
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In the same context, Questionnaires has been sent to all the top tyre suppliers via email last week, which has not been yet responded by CEAT, Apollo and MRF. Though JK Tyre is taking up the matter seriously. A spokesperson of JK Tyre said in this context: “We are in communication with the GST wing on a certain matter of interpretation that needs to be clarified for the entire tyre industry. It is work in progress and we are hopeful of arriving at a conclusion very soon.”
The GST Council is on the probe and is detecting out the loopholes prevailing in the Tyre industry due to the mismatch found in the returns since last six months. The preliminary data with GST authorities revealed the mismatch and brought the Tyre industry under the radar of GST council. A tax consultant said that the major problem lies in the replacement market. If the thorough probe reveals industry-wide malpractices, then the industry would have to pay the heavy cost as a penalty as Government has decided that in such a situation the Government would review its plan for the reduction of levy on goods which is currently 28%.
Source: https://timesofindia.indiatimes.com/
