Companies which vanished after registering itself under Goods and Services Tax (GST) are soon to face a knock of Taxmen at their doors; this alert also covers the ones which has not filed GST returns and/or paid the taxes.
A lot of taxpayers have disappeared growing a cause of concern among the tax official of GST. Besides, there are a lot of cases of fake invoices used to claim Input Tax Credit (ITC). The tax department will initiate the process by verifying the registered premises and further scrutinizing the same in case if they find the taxes have been evaded or not paid.
Karnataka is the first state to implement the plan and other states are expected to follow the same as the GST collections remain below 1 lakh a month target in November.
There are over 10 million businesses registered under GST but the count of GSTR 3B for the month of October which was filed in November was only 6.96 million. The drop in the filings of GSTR 3B has compelled the tax officials to visit more and more cases.
The tax administrators are hopeful of tackling the situation with regards to non-filers through the strong step of scrutiny and verification of the registered premises. Officials are empowered under the GST law to visit the premises, inspect and verify the required for safeguarding revenue interest.
Tax experts have also stated that there is no improvement of compliance under GST and they expect to resolve the same with such measures.
An Indirect Taxes expert also stated that the percentage of compliance in terms of filing of returns has been a major concern for the government, particularly in light of recent cases of tax evasion and fake invoices that have surfaced. Over the last several months, compliance has not improved significantly.
For the vendors to be GST compliant i.e., the businesses to file returns and pay taxes by due dates, some rigorous measures are much needed to be conducted by the tax administrators for all over the country.