GST registered Companies not filing returns to face action

Board of indirect taxes is planning to take action against companies which  registered for the goods and services tax and vanished, without filing returns or paying their taxes. The authorities are considering putting in place an extensive plan to hunt for these missing GST taxpayers. Besides, there are cases of fake invoices used to claim input tax credits.

The tax authorities will initially verify the premises of GST-registered companies and could expand the effort to include scrutiny if they find tax hasn’t been paid. Karnataka has implemented the plan and more states are expected to follow as GST collections remain below Rs 1-lakh crore a month. GST revenue stood at Rs 97,637 crore in November, falling back after crossing Rs 1lakh crore in October.

Tax administrators are also worried about a drop in filings of GSTR-3B, a tax return form to be submitted by all those registered for GST every month. The form was introduced to lower the compliance burden. According to the government, 6.96 million GSTR-3B forms were filed in November for the month of October. There are over 10 million businesses registered for GST.

According to a Karnataka government circular, the inspection of business premises of registered entities by the enforcement wings revealed non-compliance on the part of taxable people by not paying taxes that are legally due to the government or not filing returns. “For effective tackling of the situation with regard to persistent non-filers, more cases are required to be visited to ensure timely payment of tax and filing of returns,” it said.