In a move to curb tax evasion and to boost up the revenue figures, the Government may introduce another return form to the Companies that availed of more than Rs 25 lakh credit under the goods and services tax ( GST ) regime in lieu of levies paid under the previous system. Such companies will soon have to give details of their purchase ledgers for six months before the new tax regime was rolled out, ET reported. “The government will soon bring out a new ‘credit growth return’ form. This comes after a detailed analysis of the top 50,000 taxpayers showed a sharp rise in the closing balance of credit of many at the end of June last year compared with September 30, 2016. These top 50,000 taxpayers have claimed about Rs 1.5 lakh crore worth of credit,” the report said.
India switched to the Goods and Services Tax regime last year in July subsuming multiples state and central taxes such as excise duty, service tax, countervailing duty, value added tax, purchase tax, and octroi. “The form would be notified soon,” a government official with knowledge of the development told ET. Companies that have shown more than a 25% jump in credit between October 2016 and June 2017 will also have to share these details. This form will be restricted to central GST as states captured purchase details under the value added tax (VAT) regime. The current revenue figures are not satisfactory and the Government suspect businesses for claiming excess input tax credits and tax evasion. GST Collections in August was lower than July. The loss occurred to most of the States have to be compensated by the Centre.
The deadline for availing past credit expired on September 30. Under the transition rules, traders and retailers are allowed to claim a credit of 60% of taxes paid earlier against CGST or SGST dues where the tax rate exceeded 18%. In cases where the GST rate was below 18%, only 40% deemed credit was allowed against CGST and SGST dues.