09 Jan 2020Posted By: Mudit Handa


2nd National GST Conference held for controlling Fake GST ITC claims

The GST department has brought numerous features on the GST portal, in order to make GST more user-friendly for all the taxpayers having GST registration. With a view to enhance the GST framework and address various issues in GST compliance, the 2nd National GST Conference was held on 7th January 2020. The Conference was presided by Dr. Ajay Bhushan Pandey, Revenue Secretary, Ministry of Finance. Earlier, the National GST Conference was held on 25th November 2019.

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I. What was the objective of the 2nd National GST Conference?

The main objective of the 2nd National GST Conference was to formally build a synergy between Central & State GST Authorities and to share their knowledge practices, with an aim to ensure uniformity in GST administration.

The main issues that were addressed at the National GST Conference were:

  • Curbing GST evasion 

  • Controlling Fake or fraudulent GST ITC claims

  • Increasing GST revenue collection

2nd National GST Conference


II. What solutions are proposed for addressing GST related issues?

Following measures have been proposed at the National GST Conference as to address the issues in GST compliance:

 

#1. Committee for curbing fake ITC claims

The conference has decided to form a Committee of Centre & State GST officers to trace GST ITC claims by the taxpayers having GST registration, and thereby implement quick measures to check the fake refund claims. These will also include those related to the inverted tax structure. Besides, GST evasion will also be checked. The GST Committee will soon bring a Standard Operating Procedure (SOP) that will be implemented throughout India by end of January 2020.


#2. Income Tax Department to check fake IGST claims by exporters

Recently many fake IGST refund claims have been traced, that have been made by exporters having GST registration. It has been decided that the investigation wing of the Income Tax Department shall now investigate such claims by the exporters of the fake GST Input Tax Credit, export-import frauds and other invalid refund claims.


#3. Integration of CBDT, CBIC & GSTN

The GST authority has further decided to integrate the Central Board of Indirect Taxes and Customs (CBIC), Central Board of Direct Taxes (CBDT) and GST Network. An MoU would be signed among these 3 departments. Upon their integration, all the data of the taxpayers shall be exchanges between the 3 departments through an Application Program Interface (API), from CBDT to GSTN and CBIC and vice-versa. It has been decided that such data should now be shared by the end of every quarter. Earlier this was being shared annually. This will further help in streamlining GST ITC related issues.


#4. Access to the bank account details of taxpayers

The conference has also recommended that the GST department must have access to the bank account details of taxpayers having GST registration. This is to explore the banking transactions through their bank account details by the GST system, in collaboration with RBI and NPCI. it was also decided to make GSTN aligned with the Financial Intelligence Unit (FIU) so as to gain access to bank account details and the PAN-based banking transactions of the taxpayers.


#5. Sharing of GST evasion data between CBIC & CBDT

CBIC & CBDT shall now be supposed to share data of cases regarding GST evasion. Besides CBIC will have to report fake GST refund claims detected by it to the CBDT, and vice versa. This will help in the proper implementation of penal action against the crooked refund applicants.


#6. Single bank account for foreign remittance receipt & refunds

It has been suggested that a single bank account must be there for all the foreign remittance receipts as well as the GST refund disbursement. This is to link the foreign exchange remittances with IGST refunds for risky & new exporters.


#7. Amendments in GST Returns while the dissolution of business

In case a business is to be dissolved, a self-assessment declaration has to be prescribed by the taxpayer with suitable rectifications in GST Return Filing Forms. A trader will now be allowed to dissolve his business only upon the amendment of all his GST returns.


#8. Verification of mismatch in GST ITC 

One of major problems in the GST system has been the frequent mismatches in GST ITC claims. Now onwards, GST department would undertake the verification of all the mismatches of GST Input Tax Credit availed by taxpayers having GST registration, while GST return filing procedure.

These are a few recommendations by the 2nd National GST Conference in order to streamline the GST system.

 

If you need any sort of assistance with respect to the GST registration procedure, please feel free to contact our business advisor at 8881-069-069.

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