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False ITC claims under GST system is cause of worry

It refers to GST officers arresting a lawyer in East delhi having opened fake firms for claiming false Input-Tax-Credit (ITC) to tune of rupees 50.3 crores under Goods and Service Tax (GST) making total such arrests to 27 in Delhi Zone with total false ITC claim of rupees 4019.95 crores detected in Delhi zone alone. Actual false ITC claims must be multiple times the detected amount because only a little fraction of actual tax-evasion is brought to notice of authorities. Nation-wide such false ITC claims detected or undetected must be of very high amount.

There have been 950 amendments so far in GST system with traders all over the country having protested against some recent amendments on 26.02.2021. System should be so simplified and user-friendly in a manner that false ITC claims may not be possible. ITC should be allowed to be claimed only in respect of tradable commodities and not on expenses, services and production. But it can be possible only when there may be broadly just two GST-slabs by merging slabs of 3, 5, 12 and 18 percent into one of 10 or 12 percent. Even precious metals attracting special 3-percent GST slab can be brought to this unified slab and metal used for jewellery and other items may separably be billed for manufacture as service commodity. System will also remove peculiar situation requiring refund where cost of items used in manufacture have higher GST slab than that on the finally manufactured item. Other higher slab for commodities of long term use and luxury items may be retained at 28 or 30 percent. Cess on items attracting more than 28-percent GST slab may be replaced by additional GST slabs in multiples of 50 or 100 percent with even petroleum products also brought under GST network.

GST for previous month may be required to be deposited by 10th day of next month with monthly return filed by 20th of every month. Finally there may be an annual return only which in respect of previous year to be filed by 30th April of next financial year.

SUBHASH CHANDRA AGRAWAL

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