The officers of Aurangabad Regional Unit and Nashik Regional Unit of Director General of GST Intelligence (DGGI) have recently conducted simultaneous searches on the premises of a multinational brewery at Aurangabad and a molasses-based distillery at Nashik.
The search at the distillery in Nashik revealed that the company was paying GST on the part of the clearances of alcohols not fit for human consumption. The said clearances in substantial quantity were suppressed by not reporting them in the GST returns, and no GST paid on such clearances.
The scrutiny of the documents revealed that the taxpayer had cleared more than 21 lakh litres of alcohol not fit for human consumption during the period from July 2017 to July 2020. The total suppressed value of goods approximately valued at Rs.11.59 crore on which the evaded GST would be Rs.2.09 crore.
The search at the multinational brewery in Aurangabad revealed that it has suppressed the clearances of draff or spent wort. The draff or spent wort arises in the pre-fermentation stage during the process of brewing barley for the manufacture of beers. The scrutiny of the documents revealed that the taxpayer had cleared more than 1.26 crore kgs of draff/spent wort during the period from July 2017 to June 2020 and the evaded GST would approximate at Rs.71.08 lakh.
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During these investigations, the authorities detected an evasion aspect of Input Tax Credit (ITC). It was revealed that the taxpayers had not properly reversed the ITC availed on the goods and services which have been used for the manufacture of alcohols fit for human consumption on which no GST is leviable. The total GST evaded on this ground is expected to be Rs.1.16 crore approximately.
The concerned taxpayers have paid more than Rs.65 lakh immediately. A significant part of the outstanding GST liability is expected to be deposited by the taxpayers soon. If the payment is not made within the provided time limit, the department may initiate attachment of properties to safeguard the revenue.
For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.
