New Delhi, Jan 24 (KNN) The Input Tax Credit (ITC) on GSTN portal has been blocked in all cases where there are ongoing investigations or even if there is a mere allegation against a taxpayer of credits taken on the basis of bogus bills.

Talking to KNN India, Pankaj Bansal, a Delhi based exporter said, “The government should definitely stop such activities if they are happening but at the same time government should come up with such policy where the ITC claims of genuine exporters should continue.”

Bansal, who is also a senior member of Federation of Indian Micro and Small & Medium Enterprises (FISME) said, ''If somebody has done something wrong then definitely their ITC should be stopped.  The companies who are claiming ITC on bogus bill, the government should stop their GST ITC but at the same time they should have a policy that the ITC of genuine exporters shouldn't be stopped by the government.''

''The GST officials can visit the address physically mentioned in the documents to verify and check their Know Your Customer (KYC) apart from checking all the other credentials and expedite the process of claims of genuine companies and if there is a fake company then their claim should be stopped,'' Bansal suggested.

Input Tax Credit (ITC) means at the time of paying tax on output, one can reduce the tax already paid on inputs and pay the balance amount.

The Centre and States have now joined hands to formulate a nine-point strategy to streamline the GST and plug revenue leakage. These include linking foreign exchange remittances with IGST refund for risky and new exporters, investigation of fraudulent ITC cases by the IT department, a single bank account for foreign remittance receipt, and refund disbursement, beside others.

Though GST collection in December crossed Rs 1 lakh crore , there are apprehensions of a shortfall in the yearly collection. The average monthly collection during the first nine months of the current fiscal year was approximately Rs 1 lakh crore, In December, the Finance Ministry set its GST tax collection target at Rs 4.45 lakh crore for the remaining period of this financial year 2019-20, while targeting Rs. 1.1 lakh crore per month in January and February, with Rs 1.25 lakh crore for March.

After brainstorming sessions, it was decided to constitute a Committee of Centre and State officers to examine and implement quick measures in a given time frame to curb fraudulent refund claims, including the inverted tax structure refund claims, and GST evasion.

The Committee had decided to come out with a detailed SoP (Standard Operating Procedure) which was to be implemented across the country by January-end.

Considering the fraudulent IGST refund claims being made, linking foreign exchange remittances with IGST refund for risky and new exporters was explored. All major cases of fake Input Tax Credit, export/ import fraud and fraudulent refunds will also be compulsorily investigated by the investigation wing of the Income Tax Department.

Published On : 24-01-2020

Source : KNN India