The government has cancelled Goods and Services Tax (GST) registration of over 163,000 business entities due to non-filing of tax returns for more than six months to curb the menace of fly-by-night operators who create bogus firms and fraudulently avail input tax credit (ITC) worth thousands of crores.
The Government has canceled the Goods and Service Tax (GST) registration of 163,000 business entities who have not filed monthly tax returns (GSTR-3B) for the last six months or more.
Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.
“All these business entities, who had not filed their GSTR-3B returns for more than six months, were first issued the cancellation notices and then their registrations were cancelled as per standard operating procedure,” one of the officials said.
The Tax officers have been directed to follow up personally with these defaulting taxpayers so that their GSTR-3B returns due for the month are filed by November 30.
The push for better compliance comes on the heels of the tax department’s nationwide drive against fake invoice scams.
It is suspected that fraudsters often register firms under GST but remain mostly dormant on compliance while using the status to claim invalid input tax credit (ITC). As per the sources, in the Ahmedabad zone 11,048 GST registrations have been cancelled.
In the Chennai zone, 19,586 suo motu cancellations have been done so far in respect of GST taxpayers who have failed to file returns for more than six months.
The officials said that the tax authority is also scanning newly registered entities that have not provided correct details at the time of registration.
Out of 720 deemed registrations granted between August 21 and November 16 this year, where Aadhaar authentication was not done, 55 deemed registrations have been identified for the discrepancy and the process of cancellation was initiated in these cases.
Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.
Taxpayers can make GST payments through challan every month either by self-assessment of monthly liability or 35 per cent of net cash liability of previous filed GSTR-3B of the quarter. Quarterly GSTR-1 and GSTR-3B can also be filed through an SMS.
The government has launched the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme in a bid to ease the return filing experience of the Goods and Services Tax (GST) taxpayers. The scheme will come into effect from January 1, 2021, it will impact 9.4 million taxpayers, who constitute 92% of the total tax base of GST and have an annual aggregate turnover (AATO) of up to Rs 5 crore.
With the introduction of the QRMP scheme, sources say, small taxpayers would need to file only eight returns – four each GSTR-3B and GSTR-1 – instead of the existing requirement of 16 returns in a financial year, of which 12 are GSTR-3B. The new scheme would also significantly reduce taxpayers’ professional expenses on return filing as they would have to file just half the number of returns as against the current requirement of 16. Also, the QRMP scheme would be available on the common GST portal with the facility to opt-in and opt-out, and opt-in again, as per a taxpayer’s wishes.
The scheme would bring in the concept of providing input tax credit (ITC) only on the reported invoices, thus putting a curb on the menace of fake invoice frauds. Additionally, the QRMP scheme is also likely to have the optional feature of Invoice Filing Facility (IFF) to mitigate the business-related hardships of the small and medium taxpayers. Under the IFF, taxpayers who opt to file their returns quarterly would be able to upload and file such invoices even in the first and second month of the quarter for which there is a demand from the recipients.
The taxpayers won’t need to upload and file all the invoices of the month. Only those invoices, which are required to be filed in IFF as per the recipients’ demands, are to be uploaded. The remaining invoices of the first and second months can be uploaded in the quarterly GSTR-1 return.
The QRMP scheme is based on the existing return system with suitable modifications in a bid to give much-needed flexibility to the small and medium enterprises with regards to GST compliance. It was approved in principle by the GST Council in its 42nd meeting on October 5, 2020.
The Institute of Chartered Accountants of India, in its gazette notification had made the generation of UDIN from the ICAI website mandatory for every kind of certificate/tax audit report and other attests made by their members as required by various regulators. This was introduced to curb fake certifications by non-CAs misrepresenting themselves as Chartered Accountants
The income tax department will validate with the Institute of Chartered Accountants of India (ICAI) the unique document identification number (UDIN) of chartered accountants when they upload tax audit reports, the finance ministry said on Thursday.
To curb fake certifications by non-CAs misrepresenting themselves as chartered accountants, the ICAI in 2019 made generation of UDIN from the ICAI website mandatory for every kind of certificate and tax audit report and other attests made by their members as required by various regulators.
The ministry said that in line with the ongoing initiatives of the income tax department for integrating with other government agencies and bodies, income-tax e-filing portal has completed its integration with the ICAI portal for validation of UDIN generated from the ICAI portal by the chartered accountants for documents certified/attested by them.
Income-tax e-filing portal had already factored mandatory quoting of UDIN with effect from April 27, 2020, for documents certified/attested in compliance with the Income Tax Act,1961 by a chartered accountant.
“With this system level integration, UDIN provided for the audit reports/certificates submitted by the chartered accountants in the e-filing portal shall be validated online with the ICAI,” the ministry added.
It said this will help in weeding out fake or incorrect tax audit reports not duly authenticated with the ICAI.
If a chartered accountant was not able to generate UDIN before submission of audit report or certificate, the e-filing portal permits such submission, subject to the CA updating the UDIN within 5 calendar days from the date of form submission in the income tax e-filing portal.
If the UDIN for the audit report/certificate is not updated within the 15 days, such audit report and certificate uploaded shall be treated as invalid submission, the ministry added.
The Direct Tax Vivad se Vishwas Act, 2020 was enacted on March 17, 2020 to settle direct tax disputes locked up in various appellate forums.
The Ministry of Finance has extended the deadline for making a declaration under Vivad Se Vishwas Scheme till 31′ January, 2021 from 31st December, 2020.
The Ministry of Finance has extended the deadline for making a declaration under Vivad Se Vishwas Scheme till 31′ January, 2021 from 31st December, 2020.
The date for the passing of order or issuance of notice by the authorities under the Direct Taxes & Benami Acts which are required to be passed/ issued/ made by 30th March 2021 has also been extended to 31st March 2021.
The Vivad se Vishwas scheme was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020.
Given below are all the aspects you have to know about this amnesty scheme: Under this scheme, taxpayers whose tax demands are locked in dispute in multiple forums, can pay due to taxes by March 31, 2020, and get a complete waiver of interest and penalty.
If a taxpayer is not able to pay within the deadline, he gets a further time till June 30, but in that case, he would have to pay 10% more on the tax.
This include Personal income tax (PIT) refunds amounting to Rs 35,123 crore and corporate tax refunds amounting to Rs 97,677 crore during this period.
The Income Tax department has issuedrefundsworth over Rs1.32lakh crore to over 39 lakhtaxpayers so far this fiscal.
This include Personal income tax (PIT) refunds amounting to Rs 35,123 crore and corporate tax refunds amounting to Rs 97,677 crore during this period.
“CBDT issues refunds of over Rs 1,32,800 crore to to more than 39.75 lakh taxpayers between April 1,2020 to November 10,2020.
Income tax refunds of Rs 35,123 crore have been issued in 37,81,599 cases and corporate tax refunds of Rs 97,677 crore have been issued in 1,93,813 cases,” the I- T department tweeted.
In a statement, the Department of Revenue (DoR) reiterated that there will be no extra compliance burden on the taxpayers for GST turnover displayed in the Form 26AS, which is an annual consolidated tax statement that can be accessed from the income-tax website by taxpayers using their Permanent Account Number (PAN).
Prime Minister Narendra Modi launched GST into operation on the 1 st of July, 2017. GST was publicised as ‘one nation, one tax’ by the government, aimed to provide a simplified, single tax regime. GST is a dual levy where the Central Government levies and collects Central GST (CGST) and the State levies and collects State GST (SGST) on intra-state supply of goods or services. Centre also levies and collects Integrated GST (IGST) on inter-state supply of goods or services. The GST Portal is a website where all the compliance activities of GST can be done before and after GST login. Activities such as the GST registration return filing, payment of taxes, application for refund, etc. can be done on the GST Portal.
GSTN, recently launched many new features on GSTN portal. One of its features is that GSTN portal is now showing aggregate annual turnover for previous financial year after logging in to the portal.
The GST turnover is being shown in 26AS just for the information of the taxpayer. DoR acknowledged that there may be some differences in GSTR-3Bs filed and the GST shown in the Form 26AS but it can’t happen that a person shows turnover of crores of rupees in GST and doesn’t pay a single rupee of income tax.
The DoR said that the notified Income Tax Return for the current AY 2020-21 already requires reporting of GST outward supplies in the Schedule GST.
Therefore, the information displayed in Form 26AS would provide ease of compliance to the taxpayers in filling Schedule GST.
The revenue department has noticed that many unscrupulous persons are trying to avail or pass on input tax credit fraudulently by generating fake invoices and has already formulated a strategy for identifying these fake invoice generators which inter alia takes into account the income tax profiles of the suspected fake invoice generators.
These persons in most of the cases never file their income tax returns or disclose very meagre taxable income in the income tax return.
The suspected fake invoice generators are being identified for serious action under GST and other laws including suspension of their GST registration based on the fact that whether their income tax payment commensurate with the expected profit margin on turnover reported by them in the GST returns, the DoR said.
What “aggregate turnover” means?
“Aggregate turnover” is the aggregate value of all taxable supplies, exports of goods or/and services or both, exempt supplies and interstate supplies of persons having the same PAN, to be computed on all India basis. However, such taxable supplies do not include the value of inward supplies on which GST is being paid under reverse charge basis. The aggregate turnover also excludes Central tax, State tax, Union territory tax, Integrated tax and cess.
Basically, sum of the following shall be considered as an aggregate turnover:
Value of all taxable supplies of goods and services
Value of all Inter-state supplies
Value of all exempt supplies of goods and services
Value of all export of goods or services or both
However, the following items would be excluded from Turnover:
Inward supplies on which taxes are paid under reverse charge
Taxes and cesses under GST
Interstate supply of services
Transactions which are neither supply of goods or service.
Supplies provided outside India or received outside India
Extrapolation of Turnover at GSTIN level (for those who have not filed all the returns as per their eligibility or liability)
GSTIN-wise GSTR-3B turnover for FY 2019-2020 has been extrapolated by the formula: >> Total turnover declared as per all GSTR-3B filed / No. of GSTR-3B filed) X No. of GSTR-3B eligible or liable to be filed
GSTIN-wise CMP-08 outward supply has been extrapolated by the formula: >> Total outward supply declared as per all CMP-08 filed / No. of CMP-08 filed) X No. of CMP- 08 eligible or liable to be filed
Added both the values of S. No. (a) and S. No. (b).
For those taxpayers who have filed all the returns as per their respective eligibilities, value of S. No. (c) will be the actual turnover)
Aggregation of extrapolated turnover at PAN level or Annual Aggregate Turnover Resultant values as per S.No. (c) above are aggregated or rolled up at PAN level to arrive at the Annual Aggregate Turnover.
What is the relevance of knowing aggregate turnover?
The aggregate turnover is a crucial parameter for determining the following aspects:
Determining whether registration is required or not-
Aggregate Turnover is relevant for a person to determine threshold limit to obtain registration under GST.
Threshold turnover limit for exclusively supply of goods = Rs 40 lakh (Rs 20 lakh in case of supplies effected from special category states)
Threshold turnover limit for supply of Services or (goods and services both): Rs 20 lakh (Rs 10 lakh in case of supplies effected from special category states)
Determine the limit of composition levy – Threshold limit to opt for composition scheme: Rs 1.5 crore in a financial year (Rs 75 lakh in case of supplies effected from special category states).
To determine a “Taxable person” – Section 2 of CGST Act defines the “taxable person” as a person who has obtained registration or is liable to register as per section 22 and 24 of CGST Act. Here the Section 22 provides a liability to register when the tax payer’s turnover exceeds the limit as determined in certain cases. This is again based on aggregate turnover.
Calculation of Late fee –
Under section 33 any registered taxable person person who fails to file the return u/s 30 i.e Annual return shall be liable to pay late fees of Rs. 100 for every day when such failure continues subject to a maximum of an amount of 0.25% of his aggregate turnover.
This can escalate the amount of late fee because aggregate turnover will include all supplies except reverse charge.
To determine whether Audit is required –
Registered persons with an aggregate turnover exceeding the prescribed GST audit limit of Rs 2 Crore during a financial year are liable for GST Audit. The turnover limit of Rs 2 Crore is same for the registered tax persons across all States and UTs. Thus, no separate turnover limit is defined for Special Category States for GST Audit.
Therefore, it is advised to carry on the computation of aggregate turnover accurately as the same will be used at a number of places which will in turn determine the tax liability of a person.
1. Due Date for Taxpayers (having Tax Audit) – Extended to 31st Jan, 2021 2. Due Date for Taxpayers (Not having Tax Audit) – Extended to 31st Dec, 2020 3. Due Date For Taxpayers (Under TP) – Extended to 31st Jan, 2021 4. Due Date of Deposit Self Assessment Tax (Only if up to Rs. 1 lakh) – Extended to 31st Jan,2021 5. Due Date of Furnishing Audit Report by CA – Extended to 31st Dec, 2020
The income tax return (ITR) filing deadline for FY 2019-20 has been extended to December 31, 2020, for most individual taxpayers, from the earlier deadline of November 30, 2020. This the second time the tax filing deadline for FY20 has been extended.
As per the government’s press release issued on October 24, 2020, “In order to provide more time to taxpayers for furnishing of their ITR, it has been decided to further extend the due date for furnishing of Income-Tax Returns as under:
The due date for furnishing of income tax returns for these individual taxpayers [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020 as per the Act was 31st July, 2020] has been extended to 31st December, 2020.
The due date for furnishing of Income Tax Returns for the taxpayers (including their partners) who are required to get their accounts audited [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020) as per the Act is 31st October, 2020] has been extended to 31st January, 2021.
The due date for furnishing of Income Tax Returns for the taxpayers who are required to furnish report in respect of international/specified domestic transactions [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020) as per the Act is 30th November, 2020] has been extended to 31st January, 2021.
Consequently, the date for furnishing of various audit reports under the Act including tax audit report and report in respect of international/specified domestic transaction has also been extended to 31st December, 2020, said the government press release issued today.
Further, relief is provided to the small and middle class taxpayers in the matter of payment of self-assessment tax, the due date for payment of self-assessment tax date is hereby again being extended. Accordingly, the due date for payment of self-assessment tax for taxpayers whose self-assessment tax liability is up to Rs. 1 lakh has been extended to 31st January, 2021 for the taxpayers whose accounts are required to be audited and to 31st December, 2020 for the taxpayers whose accounts are not required to be audited.”
