Many companies across the country have started receiving notifications for a mismatch between their Goods and Services Tax (GST) returns and actual tax payment. Tax officials have started sending these notices after revenue authorities detected underpayment up to 34% in the current fiscal year.
In addition to underpayment of GST, companies have also received notices for mismatches in GSTR-1 (final sales return) and GSTR-2A (purchase return), which is autogenerated by the system.
Tax liability as per GSTR-1 has been estimated to be about Rs.8.50 lakh crore. However, the Exchequer has received GST collection as per GSTR-3B to the tune of Rs.8.16 lakh crore. Based on this information, the discrepancy in tax collection is estimated to be about Rs.34,400 crore for the period between July and December.
The government has asked businesses to respond to this scrutiny notice soon. While tax experts note that the GST law allows businesses to respond within 30 days, tax officials have granted only 10 days in certain cases. A notice sent by Gujarat GST commissionerate on May 4 has provided deadline only till May 14 for companies to provide a response.
In the last fiscal year, the government has reported GST collection of Rs.7.41 lakh crore since its implementation in July 2017. While the possibility of tax-evasion is still a concern, the government is working on various measures to plug the holes when it comes to leakages in tax collection.
The data on tax collection showed that the government reported excess tax collection over Rs.91,000 crore. About 49.36% of the businesses have paid Rs.6.50 lakh crore in GST while their liability as per GSTR-1 is Rs.5.59 lakh crore.
The GST Council headed by finance minister Arun Jaitley has announced various changes since the date of its implementation. Apart from bringing down the tax rate for many products, the government is also focusing on simplifying the return filing process in a bid to help taxpayers in the country.