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Second edition of National Conference of Enforcement Chiefs of State and Central GST Formations held in New Delhi today
August 21st, 2024
Posted By: Team-MMTaxClub

Two months' Special drive by Central and State formations to identify and weed out fake registrations underway since 16th August

Central and State GST formations must focus on fake registrations during the special drive to  ensure deterrence: Revenue Secretary
Balance between enforcement actions and ease of doing business is important: Revenue Secretary
Enforcement units must focus on real evasion: CBIC Chairman

The second edition of the National Conference of Enforcement Chiefs of the State and the Central GST Formations was held in New Delhi today. The conference was chaired by Shri Sanjay Malhotra, Secretary, Department of Revenue, Ministry of Finance. The National Conference comes in the backdrop of special drive being undertaken by both Central and State formations to identify and weed out fake registrations.

 

The Conference was attended by senior officers of the Department of Revenue, CBIC, Commissioners of Commercial Tax (CCT) and GST Enforcement Chiefs of the States and CEO and officers of GSTN. Other enforcement and intelligence authorities like the Central Board of Direct Taxes (CBDT), Directorate of Enforcement (ED), Directorate of Revenue Intelligence (DRI), Financial Intelligence Unit (FIU-IND) and Central Economic Intelligence Bureau (CEIB) also participated in the deliberations.

In his address on the occasion, the Revenue Secretary stressed the importance of maintaining a fine balance between enforcement actions and ease of doing business. He exhorted the Central and State GST formations to focus on the fake registrations during this special drive and stressed on the need to track the masterminds and beneficiaries of fake ITC so that strict action is taken to have the necessary deterrence effect. Shri Malhotra said that the recent changes implemented in the GST returns such as GSTR-1A would further aid the efforts of tackling GST evasion in a systematic manner.

Setting the context of the one-day conference, Shri Sanjay Agarwal, Chairman, Central Board of Indirect Taxes and Customs (CBIC), recalled the discussion in the first edition of the conference and emphasised the need for enforcement agencies to stay ahead of the evaders so that the sanctity of the GST system is preserved. He advised the enforcement units to focus on real evasion rather than interpretative issues and general industry practice.
In his welcome address, Shri Vivek Agarwal, Additional Secretary, Revenue, expected that the participating officers would benefit from the agenda which includes discussion on sector specific enforcement issues, emerging issues in enforcement and techniques to tackle evasion. He stressed the importance of following up on the actions identified so that the useful purpose of the deliberations in the conference are achieved.

During the one-day conference, various presentations were also made by the GST formations. Action taken report of the actions identified in the first edition of the conference held in March 2024 was reviewed and the formations were advised to continue their efforts in ensuring that the actions are completed. The participants were acquainted with the details of the 2 months’ special drive on fake registrations which has been launched on 16th August 2024. This drive will be undertaken in a co-ordinated manner between the Central and State formations. Based on certain identified risk parameters, close to 59,000 potential fake firms have been identified for verification and further enquiry. CEO, GSTN made a presentation on various technological initiatives to tackle the issue of evasion while at the same time ensuring business facilitation is not hampered.

In his presentation, DG, DGGI said that the DGGI has detected fake ITC evasion of Rs. 1,20,000 crore from the year 2020 till date with special emphasis being laid on identifying and apprehending the masterminds and disrupt syndicates, operating across the country; with 170 such masterminds have been apprehended already. Some of the best practices/guidelines issued to bring in uniformity in action and ensuring ease of doing business were also deliberated.

Commissioner of Maharashtra State GST showcased the GST Enforcement Management System (GEMS) implemented in the State to ensure that the enforcement actions are properly tracked and closed so that there is transparency in the process and demands are crystallised within a reasonable time paving way for higher probability of recovery of evaded taxes.

During the focussed thematic sessions, zonal units of DGGI/CBIC presented various case studies on misuse of APMC accounts, fintech companies, clandestine clearances, issues in financial sector, taxation of emerging service sector as cryptos, NFTs, TDRs etc.

Chief Commissioner Tax (CCT), Gujarat, discussed the modes of evasion detected in manpower supply services and presented the learnings and way forward. Officials from West Bengal presented the enforcement cases in real estate sector while Karnataka SGST officer shared their experience in leveraging interdepartmental data for enhanced evader detection. CCT, Rajasthan, presented various enforcement case studies; while CCT, Tamil Nadu elaborated on the state’s efforts in state wide surprise enforcement operation against bill trader, street surveys conducted and a unique process of detecting fake registrants by sending a friendly welcome letter to new registrants.

Various participants stressed the need for building a national register of enforcement actions so that real time information gets disseminated to all enforcement units in Centre and State formations. Taking cue from the ‘Samvad’ sessions conducted by Rajasthan and street surveys conducted by Tamil Nadu, Revenue Secretary underscored the importance of being continuously connected to the trade and business in the field reducing the need for intrusive enforcement action and enabling proactive compliance.

The conference provided an effective forum for experience sharing and knowledge transfer between the GST officers of Central and State formations.

Source

 

CBDT issues clarification in respect of Income-tax clearance certificate (ITCC)
August 21st, 2024
Posted By: Team-MMTaxClub

Section 230 (1A) of the Income-tax Act, 1961(the ‘Act’) relates to obtaining of a tax clearance certificate, in certain circumstances,by persons domiciled in India. The said provision, as it stands, came on the statute through the Finance Act, 2003 w.e.f. 1.6.2003. The Finance (No.2) Act, 2024 has made only an amendment in Section 230(1A) of the Act, vide which, reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the ‘Black Money Act’) has been inserted in the said Section. This insertion has been made to also cover the liabilities under the Black Money Act in the same manner as the liabilities under the Income-tax Act,1961 and other Acts dealing with direct taxes for the purpose of Section 230(1A) of the Income-tax Act,1961.

There appears to be a mis-information about the said amendment emanating from incorrect interpretation of the amendment. It is being erroneously reported that all Indian citizens must obtain income-tax clearance certificate (ITCC) before leaving the country. This position is factually incorrect.

As per section 230 of the Act, every person is not required to obtain a tax clearance certificate. Only certain persons, in respect of whom circumstances exist which make it necessary to obtain a tax clearance certificate,are required to obtain the said certificate. This position has been in the statute since 2003 and remains unchanged even with the amendments vide Finance (No. 2) Act, 2024.

 In this context, the CBDT, vide its Instruction No. 1/2004, dated 05.02.2004, has specified that the tax clearance certificate under Section 230(1A) of the Act, may be required to be obtained by persons domiciled in India only in the following circumstances:

  1. where the person is involved in serious financial irregularities and his presence is necessary in investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or
  2. where the person has direct tax arrears exceeding Rs. 10 lakh outstanding against him which have not been stayed by any authority.

Further, a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.

In view thereof, it is reiterated that the ITCC under Section 230(1A) of the Act, is needed by residents domiciled in India, only in rare cases, such as (a) where a person is involved in serious financial irregularities or (b) where a tax demand of more than  Rs.  10 lakh is pending which is not stayed by any authority.

Important advisory in respect of Changes in GSTR 8
August 9th, 2024
Posted By: Team-MMTaxClub

Please refer to the GST Council decision to the effect that TCS rate has been reduced from the current 1% (0.5% CGST + 0.5% SGST/UTGST, or 1% IGST) to 0.5% (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST) effective from 10/07/2024 vide Notification No. 15/2024 dated 10.07.2024.

Thus, the following important aspects regarding the TCS rates effective from 10.07.2024 are to be noticed:

1.   Period from 1st July to 9th July 2024:

     •  During this period, the old TCS rate of 1% will continue to apply. Taxpayers are required to collect & report TCS at this rate for all transactions happened between these dates.

2.   From 10th July 2024 onwards:

     •  A revised TCS rate of 0.5% will come into effect from 10th July 2024. Taxpayers must ensure their systems and processes are updated to reflect this new rate for all transactions happened from 10th July forward.

Further, as few taxpayers have reported validation error while filing GSTR-8 for the month of July 2024, it is to inform that GSTN team is working on the changes announced by GST Council in respect of GSTR 8, is expected to be complete in next couple of days, and users would be able to file returns from 06th August 2024 midnight onwards. Any inconvenience caused in this regard is regretted.

Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Jammu & Kashmir and West Bengal
August 9th, 2024
Posted By: Team-MMTaxClub

This is to inform taxpayers about recent developments concerning the application process for GST registration. It is advised to keep the following key points in mind during the registration process.

1.    Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.

2.    The above-said functionality has been developed by GSTN. It has been rolled out in Jammu & Kashmir and West Bengal on 02nd August 2024.

3.    The said functionality also provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a)   A Link for OTP-based Aadhaar Authentication OR

(b)   A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail) .

4.    If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point 3(a), she/he can proceed with the application as per the existing process.

5.    However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail. Once the applicant gets the confirmation of appointment through e-mail (the appointment confirmation e-mail), she/he will be able to visit the designated GSK as per the chosen schedule.

6.    At the time of the visit of GSK, the applicant is required to carry the following details.

(a)   a copy (hard/soft) of the appointment confirmation e-mail

(b)   the details of jurisdiction as mentioned in the intimation e-mail

(c)   Aadhaar Card and PAN Card (Original Copies)

(d)   the original documents that were uploaded with the application, as communicated by the intimation e-mail.

7.    The biometric authentication and document verification will be done at the GSK, for all the required individuals as per the GST application Form REG-01.

8.    The applicant is required to choose an appointment for the biometric verification during the maximum permissible period for the application as indicated in the intimation e-mail. In such cases, ARNs will be generated once the Biometric-based Aadhaar Authentication process and document verification are completed.

9.    The feature of booking an appointment to visit a designated GSK is now available for the applicants of Jammu & Kashmir and West Bengal.

10.    The operation days and hours of GSKs will be as per the guidelines provided by the administration in your respective state.

CBDT relaxes provisions of TDS/TCS in event of death of deductee/collectee, before linkage of PAN and Aadhaar
August 9th, 2024
Posted By: Team-MMTaxClub

The Central Board of Direct Taxes (CBDT) has relaxed provisions of TDS/TCS in event of death of deductee/collectee, before linkage of PAN and Aadhaar.

In view of genuine difficulties being faced by taxpayers, CBDT issued the Circular no. 8 of 2024 dated 05.08.2024, and vide the same, the Government has relaxed the provisions of TDS/TCS as per the Income-tax Act, 1961(the ‘Act’) in the event of death of deductee/collectee before linking of PAN and Aadhaar.

In order to redress the grievances of the taxpayers wherein instances have been cited, of demise of the deductee/collectee on or before 31.05.2024 and before the option to link PAN and Aadhaar could have been exercised, the Circular provides that there shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC of the Act, as the case maybe pertaining to the transactions entered into upto 31.03.2024.

This is in continuation of Circular no. 6 of 2024 dated 23.04.2024 issued earlier by CBDT wherein the date for linking of PAN and Aadhaar was extended upto 31.05.2024 for the taxpayers (for the transactions entered into upto 31.03.2024) to avoid higher TDS/ TCS as per the Act. The Circular No. 06 of 2024 dated 23.04.2024 and Circular No. 08 of 2024 dated 05.08.2024 are available on www.incometaxindia.gov.in.