MM TAX CLUB

CGST, Mumbai busts fictitious entities availing Input Tax Credit against Fake Invoices; fraudulent transaction of Rs. 6.23 Crore

Special Drive detects Tax Evasion of Rs. 3,500 Crore so far; Rs. 460 Crore recovered

Anti-evasion Wing, Central Goods and Services Tax Bhiwandi Commissionerate, Mumbai have busted a network of fictitious entities in Maharashtra. The entities were involved in availment and utilisation of Input Tax Credit (ITC) against fake invoices without actual supply of goods. Searches were conducted at more than a dozen locations at various premises located in Navi Mumbai, Thane and Palghar.

Investigation in the case revealed that M/s. Shree Balaji Steel had fraudulently claimed ITC of Rs. 6.23 Crore from various fictitious entities and passed it on to different buyers. Proprietor and manager of the firm were arrested on yesterday, 12^th December 2021 under Section 69 of CGST Act. They were produced before the Additional CMM court, Fort, Mumbai. The Hon'ble Court has remanded both the accused to 14 days’ judicial custody. The quantum of duty evasion is likely to go up during the ongoing investigation.

Detection of Tax Evasion Cases Increased Substantially

This case is part of the special drive initiated by CGST Mumbai Zone in September 2021. The special drive which was initiated to check tax evasion and enhance revenue mop-up relies on intensive data mining and data analytics. Special IT tools are used to do spot profiling of tax evaders after examining their track records in return filling and other credentials. The drive has resulted in detection of tax evasion of Rs. 3500 Crore, out of which Rs. 460 Crore have been recovered and 30 persons have been arrested.

The CGST Mumbai zone will further intensify this drive against tax evaders to support the honest and compliant tax payers and to maximise the GST revenue collection in the service of the nation.

MP GST vide Notification No. F-A-3-08-2018-1-V(43) dated 24^th April 2018 had exempted all goods from generation of E-way bill for intra state movement of Goods, except 11 items as specified in notification where e way bill require to be Generated if value of Goods exceeds Rs.50,000/-. 11 Items specified in aforesaid notification are as under;

Now, MPGST vide Notification no. F-A-3-08-2018-1-V(85) dated 2^nd December 2021 after serial Number 11 above included 30 more items in the list where e way bill requires if Value exceeds Rs.50,000/- and in serial no. 7 above HSN code 2401 inserted which is for Unmanufactured tobacco, so Unmanufactured tobacco also come under preview of MPGST rules.

Newly inserted goods are listed hereunder;

All Newly inserted goods as above covered under E-way bills rules, Notification No. F-A-3-08-2018-1-V(85) dated 2^nd December 2021 come into force from date of its publication in official Gazette.

Union Minister for Ports, Shipping, Waterways and Ayush Shri Sarbananda Sonowal has expressed hope that India and Russia can collaborate for benefit in the fields of civilian shipbuilding and inland waterways. He said, both the countries are looking at new areas of cooperation to further the bilateral relations.

In a tweet message, after receiving the Russian Federation Deputy Minister of Industry and Trade Mr Oleg Ryazantsev at his office in New Delhi, the Minister said that the two sides discussed Russian participation in civilian shipbuilding and inland waterways and also the interest of Indian companies in the Russian Far East in energy, transportation and logistic sectors. He added that they also talked about training of Indian Seafarers for operations in the Arctic region.

To initiate infrastructure development to boost the economy after COVID-19 pandemic, Union Budget 2021-22 has provided a capital outlay of Rs. 5.54 lakh crore, an increase of 34.5% over Budget Estimate of FY 2020-21. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha today.

The Minister stated that the Government has also made provision of more than Rs. 2 lakh crore for States & Autonomous Bodies towards their Capital Expenditure. National Monetization Pipeline was also prepared to unlock the value of investments in public sector assets by tapping private capital and efficiencies for delivering infrastructure services. These proceeds are envisaged to augment existing/ create Greenfield infrastructure. Additionally, Central Ministries/Departments have been suggested to expedite infrastructure investment by front-loading capital expenditure.

Giving more details, the Minister said that the CCEA in its meetings held on 21.10.2021 approved the proposal for development of ‘PM GatiShakti National Master Plan (NMP)' for providing multimodal connectivity infrastructure to various Economic Zones. It aims to depict various economic zones and the infrastructure linkages to holistically integrate all the multimodal connectivity projects, remove missing gaps for seamless movement of people, goods & services, minimize disruptions, improve logistics efficiency. The sectors intended to be included in PM GatiShakti NMP are Transport & Logistics - Roads, Rail, DFC, Airports, Inland Waterways, Ports, Logistics infrastructure, Bulk material transportation, Urban Public Transport; Energy – Electricity Transmission with specific reference to evacuation of renewable energy projects, National Gas Grid; Communication – OFC network, Telecommunication Towers; Commercial infrastructure - Common infrastructure for industrial parks with industrial activities like, Food parks/Textile parks, SEZs, Electronics Manufacturing Clusters, Fishing Clusters/Harbours, Defence Corridors/Industrial Corridors, Pharma & Medical Device Clusters.

In response to the source of funding for the aforesaid project, the Minister stated that there is no financial implication for multimodal connectivity infrastructure to the economic zones under the PM GatiShakti NMP as the concerned line Ministries/Departments will seek funding of their respective infrastructure projects serving the economic zones as per procedures laid under their respective schemes/programmes.

Giving more details, the Minister stated that the National Infrastructure Pipeline (NIP) was launched with projected infrastructure investment of around Rs. 111 lakh crore during FY 2020-2025 to provide world-class infrastructure across the country, and improve the quality of life for all citizens. NIP was launched with 6,835 projects, which has expanded to over 9,000 projects covering 34 sub- sectors. NIP is a first-of-its-kind, whole-of-government exercise and covers all infrastructure sub- sectors, including MSMEs working in infrastructure sector, as mentioned in Harmonized Master List of Infrastructure Sub-sectors notified by Department of Economic Affairs (DEA).

Auction for Sale (Re-issue) of (i) ‘4.56% GS 2023’, (ii) ‘5.74% GS 2026’, (iii) ‘6.67% GS 2035’, and (iv) ‘6.99% GS 2051’

The Government of India (GoI) has announced the Sale (Re-issue) of (i) ‘4.56% Government Security, 2023’ for a notified amount of Rs 2,000 crore (nominal) through price based auction using uniform price method (ii) ‘5.74% Government Security, 2026’ for a notified amount of Rs 6,000 crore (nominal) through price   based auction using uniform price  method (iii) ‘6.67% Government Security, 2035’ for a notified amount of Rs 9,000 crore (nominal) through price based auction using uniform price method, and (iv) ‘6.99% Government Security, 2051’ for a notified amount of Rs 7,000 crore (nominal) through price based auction using multiple price method.

GoI will have the option to retain additional subscription up to ₹2,000 crore each against one or more security/securities.  The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on Friday i.e. December 10, 2021.

Up to 5% of the notified amount of the sale of the Securities will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on December 10, 2021. The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m.

The result of the auctions will be announced on December 10, 2021 (Friday) and payment by successful bidders will be on December 13, 2021 (Monday).

The Securities will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time.