Over 22,300 fake GST identification numbers (GSTIN) were detected by the officers of the Directorate General of GST Intelligence (DGGI).
GST is the finest example of co-operative federalism in the history of India.
New Delhi: India’s GST authorities have detected GST fraud of Rs 55,575 crore over the last two years and arrested over 700 persons for causing loss to the exchequer, an official said on Thursday.
The government on November 9, 2020, launched a nationwide special drive against unscrupulous entities for availing and passing on Input Tax Credit (ITC) fraudulently by issuing fake/bogus invoices, thereby evading Goods and Services Tax (GST).
“In the two years of the special drive, GST/ITC fraud worth Rs 55,575 crore has been detected. 719 persons have been arrested, which include 20 CA/CS professionals,” the official told PTI.
Voluntary deposits of Goods and Services Tax (GST) worth Rs 3,050 crore have been made during the period. The official did not disclose the recovery amount in these cases, but said it would be a “sizeable amount”.
“Credible intelligence, coordination between intelligence agencies like DGGI, DRI, Income Tax, Enforcement Directorate and CBI, have helped us crackdown on tax evaders,” the official said.
Steps to curb GST
The GST department is taking steps to curb evasion, including verification of registration, e-way bill requirement, and validation for filing GST returns, and also placed restrictions on the quantum of ITC that can be used by businesses for GST payment.
A nationwide GST, which subsumed 17 local levies like excise duty, service tax and VAT and 13 cesses, was rolled out on July 1, 2017.
“In the recent years, the department has stepped up action against fake ITC claims. The steps taken by GST officers have definitely improved compliance and that is getting reflected in monthly GST collection,” the official said.
In October, GST revenues registered the second highest collection ever at nearly Rs 1.52 lakh crore, second only to April when the mop-up was about Rs 1.68 lakh crore.
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GST mop-up has been over Rs 1.40-lakh crore for eight months in a row, while for the two months it has crossed the Rs 1.50 lakh crore mark.
With economic activity gaining momentum and improved compliance, officials expect Rs 1.50 lakh crore to be the ‘new normal’ for monthly GST revenues.
GST revenue in April was about Rs 1.68 lakh crore, May (Rs 1.41 lakh crore), June (Rs 1.45 lakh crore), July (Rs 1.49 lakh crore), August (Rs 1.44 lakh crore), September (Rs 1.48 lakh crore) and October (Rs 1.52 lakh crore).
One Nation – One Tax Goods and Services Tax
- Introduction
In the words of Prime Minister Narendra Modi, the Goods and Services Tax (GST) is “a path-breaking legislation for New India”. This revolutionary taxation system was rolled out on the midnight of 1 July, 2017 in a ceremony held in the Central Hall of Parliament. GST is not merely a tax reform but a milestone in realizing Sardar Vallabhbhai Patel’s dream of building ‘Ek Bharat – Sreshtha Bharat’.
- Need for GST
Before 1 July 2017, Indian indirect tax regime was highly fragmented. Centre and States were separately taxing goods and services. There were many taxes like excise duty, service tax, VAT, CST, purchase tax, entertainment tax etc.
In addition, there was multiplicity of rates, laws and procedures. This caused heavy compliance burden. Imposition of tax on tax was another serious problem. For example, VAT was levied on a value that included excise duty. Input tax credit chain broke as goods moved from one state to another, resulting in hidden cost for the business. There were tax nakas at every inter-state border, creating bottlenecks in inter-state transport of goods. Every state was effectively a distinct market for the industry as well as consumer. Industry’s choice of locating factories or warehouses was heavily influenced by the prevailing tax regime rather than pure business consideration, making the industry uncompetitive.
- The Journey to GST – Timeline
2000 – PM conceptualized GST and setup a committee to design GST model
2003-04 – FRBM Committee formed which recommended introduction of GST
2006 – Union Finance Minister, in the 2006-07 Budget Speech, announced introduction of GST from April 1, 2010.
2009 – First discussion paper on GST released
2011 – Constitution (115th Amendment) Bill 2011 for incorporating relevant provisions of GST introduced in Parliament
2011-13 – GST Bill referred to Standing Committee
2014 – Constitution (115th Amendment) Bill lapsed with the dissolution of 15th Lok Sabha, necessitating a fresh Constitutional Amendment Bill
2014-15 – The Constitution (122nd Amendment) (GST) Bill, 2014 was introduced and passed in May 2015
August 2016 – The Constitution (101st Amendment) Act was enacted
September 2016 – Constitutional changes made vide 101st Amendment come into force. GST Council created, 1st GST Council Meeting held
May 2017 – GST Council recommended all the rules
1st July 2017 – GST Launched
Post 2014, the Central Government expedited the process, resumed discussions with states and all other stake holders with new vigour.
Two significant initiatives of the Government of India – creation of the GST Council and assuring the States of a guaranteed revenue flow to them proved to be decisive in bringing the States on board.
Government of India assuring each State a minimum growth of 14 per cent per year for five years over their revenues. This commitment of Centre clearly showed its belief in the long-term benefits of GST and helped assuage the concerns of the States.
Creation of Goods and Service Tax Network (or GSTN), a special purpose vehicle, by the Central Government, for automation of business processes with equal participation of Centre and States, with its adequate resourcing was also a major step taken by central Government towards GST.
- Salient Features of GST
Ending decades of twists and turns, GST subsumed 17 large taxes and 13 cesses
With uniform tax on supplies of goods and services, India turned into one market.
GST ensured compliance simplification with:
Uniform processes across the country
Simple registration process – Single return – Minimal physical interface
Faster refunds
Fully IT driven system
Free flow of goods – Check posts removed
- Benefits of GST to MSME
MSMEs have gained significantly by GST. Earlier VAT exemption and composition scheme thresholds were very small.
In GST, threshold has been initially fixed at Rs 20 lakh and has subsequently been increased to Rs 40 lakh for goods.
GST introduced a composition scheme which allowed small businesses to pay a fixed rate on their turnover without any paperwork. This composition threshold is Rs 1.5 crore a year for goods and Rs 50 lakh for services.
GST has opened up new avenues through quick bill discounting and loans to MSMEs.
Compliance burden of MSMEs has reduced significantly with option of quarterly return filing for taxpayer having annual turnover of Rs 5 crore.
- Benefits of GST to Consumers
GST is a pro-people reform. Hence, consumer is at the centre of this reform. Average tax rates in GST have come down. This has been made possible as tax base expanded on rollout of GST and compliance improved. Taxpayers’ number has doubled from earlier 60 lakh to about 1.2 crore. The Government has progressively lowered tax rates on essential and daily use items. A Finance Ministry study suggested that consumers saved at least four per cent on their household monthly expenses on an aggregate after GST. Thus, consumers now spend less on daily consumables like cereals, edible oils, sugar, sweets and snacks.
- Impact of GST on Logistics Sector
GST ended long queues of trucks & goods carriers at highway toll plazas freeing goods movement across states.
Nakas, notorious for corruption and also resulting in restricting and slowing down the movement of goods disappeared.
Credible studies point to an improvement of over 33 per cent in transport time after GST implementation.
Millions of litres in petrol and diesel have also been saved apart from decongesting arterial roads.
E-way bill system has helped government to facilitate monitoring of movement of essential commodities and medical supplies during lockdown necessitated by Covid-19 pandemic.
- GST and Cooperative Federalism
GST is the finest example of co-operative federalism in the history of India. Centre and States overcame all the hurdles in the way of GST, in complete consensus, in the larger interest of the country and its people. The GST Council, a federal body comprising the Union Finance Minister as its Chairman and Finance Ministers of all States as members, has played its role to perfection. Tax administration of Centre and States are working in close harmony. One of the biggest triumphs associated with GST is the spirit and display of cooperative federalism, with almost all decisions on GST being taken with consensus among members of the GST Council.
- Outcome of New Tax Regime
Tax base has doubled in GST.
Goods now move faster.
Refunds come quickly.
Consumer gains with reduction tax burden on items of consumption.
- GST collection Month on Month for the last four years.
The gross GST collection in April 2022 is all time high at Rs. 1.67 lakh crore.
October 2022 GST collection has been the second highest at over Rs. 1.51 lakh crore.
The revenues for the month of June 2022 are 56% higher than the GST revenues in the same month in 2021 of ₹92,800 crore.
The average monthly gross GST collection for the first quarter of the FY 2022-23 has been ₹1.51 lakh crore against the average monthly collection of ₹1.10 lakh crore in the first quarter of the last financial year showing an increase of 37%.
GST Collection in October 2022
The gross GST revenue collected in the month of October 2022 is ₹ 1,51,718 crore of which CGST is ₹ 26,039 crore, SGST is ₹ 33,396 crore, IGST is ₹ 81,778 crore (including ₹ 37,297 crore collected on import of goods) and Cess is ₹ 10,505 crore (including ₹ 825 crore collected on import of goods), which is second highest till date.
The government has settled ₹ 37,626 crore to CGST and ₹ 32,883 crore to SGST from IGST as regular settlement. In addition, Centre has also settled Rs 22,000 crore on adhoc basis in the ratio of 50:50 between Centre and States. The total revenue of Centre and the States after regular as well as adhoc settlements in the month of October 2022 is ₹74,665 crore for CGST and ₹ 77,279 crore for the SGST.
The revenue for October 2022 is second highest monthly collection, next only to the collection in April 2022 and it is for the second time the gross GST collection has crossed Rs. 1.50 lakh crore mark. October also saw the second highest collection from domestic transactions, next only to April 2022. This is the ninth month and for eight months in a row now, that the monthly GST revenues have been more than the ₹ 1.4 lakh crore mark. During the month of September 2022, 8.3 crore e-way bills were generated, which was significantly higher than 7.7 crore e-way bills generated in August 2022.
