Category: GST

GST Articles, Video, PPT, Discussion, Expert Analysis

Updates-07th March 2022

Posted on by Business So Simple in Company Law, Court Room, GST, Income Tax, Legal awareness, News Desk

🖋️ Court room

SC Allows Insolvency Application Withdrawal as Majority Homebuyers accepted Builder’s Settlement during CIRP

Amit Katyal Vs Meera Ahuja (Supreme Court of India) dated 03/03/2022

Sale deed registration operate from the time from which it would have commenced to operate if no registration was required or made

Chitranshi Goyal Vs Indian Oil Corporation Ltd. (Rajasthan High Court) dated 22/02/2022

Parties by agreement cannot give jurisdiction to a Court which lacks jurisdiction

Aanchal Mittal Vs Ankur Shukla (Delhi High Court) dated 25/02/2022

Summons for appearance & authorization for arrest under GST is not a Criminal Proceedings

Saurabh Mittal Vs Union of India (Delhi High Court) dated 11/02/2022

Compounding Benefit under Income Tax cannot be denied for non-acquittal from Criminal Charges

Jai Singh Goel Vs Chief Commissioner of Income Tax (Central) & Anr. (Delhi High Court) dated 25/02/2022

✒️ Laws-Act, Rule, Regulation,Notification, Circular etc.

LLP (2nd Amendment) Rules, 2022 dated 04th March 2022 (Clausewise analysis)

Auto-population of e-invoice details into GSTR-1 (GST Portal updates-03 March 2022)

https://businesssosimple.com/2022/03/04/auto-population-of-e-invoice-details-into-gstr-gst-portal-updates-03-march-2022/

✒️ Articles, News etc.

“Net Profit” calculation for CSR & Managerial remuneration II Net Profit as per Section 198 of CA 2013

ROC Adjudication order dated 03rd March 2022 for violation of 2nd proviso of Section 149(1) of CA 2013 (Non appointment of women director)

Exporter arrested for GST fraud case (Fraudulent ITC claim of Rs. 15.26 Cr.)-GST Updates -04-03-2022

Exporter arrested for GST fraud case (Fraudulent ITC claim of Rs. 15.26 Cr.)-GST Updates -04-03-2022

Posted on by Business So Simple in GST

Exporter arrested for GST fraud case (Fraudulent ITC claim of Rs. 15.26 Cr.)-GST Updates -04-03-2022

The officers of Anti Evasion wing of Thane CGST Commissionerate of Mumbai zone have arrested an exporter who is Director of a Private Limited Company, for fraudulently claiming GST Input Tax Credit (ITC) of Rs. 15.26 Crore. This ITC was claimed on the basis of bogus invoices of  Rs. 85 Crore issued by the fake entities.

Based on inputs received from Delhi Customs and further developed by Officers of Thane Commissionerate, an investigation was initiated against M/s. Corvette Tradelink Pvt. Ltd, Borivali. Investigation revealed that this firm was engaged in export of footwear and had availed GST Input Tax Credit fraudulently on the basis of bogus invoices issued by non-existent fake entities from  Delhi The Company had used this fake ITC for payment of IGST for exports through ICD Tughlakabad, Delhi and had subsequently claimed IGST refund from Indian Customs on the fake ITC so used.

One Director of the said Private Limited Company  was arrested on 03.03.2022, under Section 69 of CGST Act 2017 for contravention of Section 132(b) and 132(c) of CGST Act 2017 and produced before Chief Metropolitan Magistrate, Mumbai. The accused  was sent to judicial custody for 14 days by the magistrate.  If proved guilty, he shall face imprisonment up to 5 years and fine.

This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the tax evaders and fraudsters. CGST Thane Commissionerate has detected tax evasion of Rs. 1238 , recovered  Rs. 20 crore and arrested 7 persons during last six months.

The CGST department is using data-mining, data analysis and network analysis tools to identify potential tax evaders and fraudsters. The department is focusing on all sectors of economy including service sector, exports, imports and digital economy to identify tax evaders who has been causing unfair competition for honest and compliant tax payers. The department is going to intensify this anti-evasion drive in the coming days and months.

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Auto-population of e-invoice details into GSTR-1 (GST Portal updates-03 March 2022)

Posted on by Business So Simple in GST
  1. Generation of e-invoice is mandatory for certain class of taxpayers, as notified by the Government. These taxpayers are required to prepare & issue their e-invoices by reporting their invoice data in the prescribed format (e-invoice schema in FORM GST INV-01) and reporting the same on the Invoice Registration Portal (IRP). Invoices reported successfully on the IRP are given a unique Invoice Reference Number (IRN). The documents (invoices, debit notes, credit notes) reported on the IRP are then transmitted electronically to the GST system and are auto-populated in the respective tables of GSTR-1.
  2. For a detailed advisory regarding auto-population of e-invoice data into GSTR-1 tables, please refer below:

Auto population of e-invoice details into GSTR-1

2 held by Faridabad CGST Commissionerate for issuing fake invoices of over Rs 200 crore and availing involving fraudulent ITC of Rs 31.85 crore (Press release 24th Feb 2022)

Posted on by Business So Simple in GST

Central Goods and Services Tax (CGST) Commissionerate, Faridabad, of Panchkula CGST Zone, on 23.02.2022 arrested two persons for running a fake billing racket, involving five (5) dummy firms, dealing in trading of iron scrap, registered in Faridabad, Haryana, for issuance of fake invoices of over Rs 200 crore without actual supply of goods and availing and passing fraudulent Input Tax Credit (ITC) amounting to Rs. 31.85 crore.

A team of officers of Anti-Evasion, CGST Commissionerate, Faridabad, conducted simultaneous searches at 5 places in Faridabad on 22nd February, 2022. During the investigation, it was found that the said firms have been availing and passing on fraudulent Input Tax Credit based on bogus / fake invoices without actual supply of goods.

As per Section 132 of CGST Act 2017, issuance of an invoice or bill without supply of goods or services and wrongful availment or utilization of Input Tax Credit is a cognizable and non-bailable offence if the amount is over Rs. 5 crore.

Both the proprietors of the said firms have accepted that they have availed and passed on fraudulent ITC of Rs. 31.85 crore, without actual supply of goods to inter-state recipients and have accepted the total GST liability of Rs. 31.85 crore during initial investigation. The quantum may increase in future.

Therefore, both the accused have been arrested under Section 69 of Central Goods and Services Tax Act, 2017 for committal of offences under Section 132(1)(b), 132(1) (c) & 132 (5) of the CGST Act, 2017. They were produced before the CJM Court, Faridabad, on 23.02.2022 and were remanded to 14 days Judicial Custody.

Further investigation in the case is underway.

Delhi South CGST unearths fake invoicing racket of Rs 611 crore involving tax evasion of 38.5 crore (Press release 24 Feb 2022)

Posted on by Business So Simple in GST

A specific intelligence was developed by the officers of Delhi South CGST Commissionerate concerning certain bogus firms that were created solely for the purpose of generating fake invoices and passing ineligible input tax credit along the chain.

Searches and inspections were conducted across locations spread across Delhi, unearthing a cartel running 54 bogus firms registered in Delhi –NCR region that were engaged in fake invoicing and circular trading. Incriminating documents such as rubber stamps and letter heads of various firms, mobile phones, laptops etc. have been seized from the search premises.

Preliminary enquiry conducted so far into these transactions has revealed fake invoicing of around Rs. 611 crores and tax evasion of over Rs. 38.5 crores. The members of cartel in their Confessional statements have accepted their roles in managing these bogus firms.

The persons behind these bogus firms hatched the conspiracy to defraud the government and committed offences specified under section 132(1)(b) and 132(1)(c) of the CGST Act 2017 which are cognizable and nonbailable.  Three key persons of the cartel namely Sh. Ankit Gupta, the mastermind managing these bogus firms and two of his accomplice Sh. Rabiendra Singh and Sh. Rajendra Singh has been arrested on 23.02.2022. The accused were produced before the Duty Magistrate following which they have been remanded to judicial custody for 14 days.

Further investigation is under progress.

Upcoming GSTR-1/IFF enhancements

Posted on by Business So Simple in GST

Upcoming GSTR-1/IFF enhancements

23/02/2022

Upcoming GSTR-1 enhancements & improvements :

  1. The statement of outward supplies in FORM GSTR-1 is to be furnished by all normal taxpayers on a monthly or quarterly basis, as applicable. Quarterly GSTR-1 filers have also been provided with an optional Invoice Furnishing Facility (IFF) for reporting their outward supplies to registered persons (B2B supplies) in the first two months of the quarter. Continuous enhancements & technology improvements in GSTR-1/IFF have been made from time to time to enhance the performance & user-experience of GSTR-1/IFF, which has led to improvements in Summary Generation process, quicker response time, and enhanced user-experience for the taxpayers.
  2. The previous phase of GSTR-1/IFF enhancement was deployed on the GST Portal in November 2021. In that phase, new features like the revamped dashboard, enhanced B2B tables, and information regarding table/tile documents count were provided. In continuation to the same, the next Phase of the GSTR-1/IFF improvements would be implemented shortly on the Portal.
  3. GSTR-1/IFF can be viewed as usual by navigating in the following manner :
    Return Dashboard > Selection of Period > Details of outward supplies of goods or services GSTR-1 > Prepare Online
    The following changes are being done in this phase of the GSTR-1/IFF enhancements :
  4. Removal of ‘Submit’ button before filing : The present two-step filing of GSTR-1/IFF involving ‘Submit’ and ‘File’ buttons will be replaced with a simpler single-step filing process . The upcoming ‘File Statement’ button will replace the present two-step filing process and will provide taxpayers with the flexibility to add or modify records till the filing is completed by pressing the ‘File Statement’ button.
  5. Consolidated Summary : Taxpayers will now be shown a table-wise consolidated summary before actual filing of GSTR-1/IFF. This consolidated summary will have a detailed & table-wise summary of the records added by the taxpayers. This will provide a complete overview of the records added in GSTR-1/IFF before actual filing.
  6. Recipient wise summary : The consolidated summary page will also provide recipient-wise summary, containing the total value of the supplies & the total tax involved in such supplies for each recipient. The recipient-wise summary will be made available with respect to the following tables of GSTR-1/IFF, which have counter-party recipients :
            • The functionality will be made available on the GST Portal shortly, and the same will be intimated to taxpayers. For detailed advisory & sample screenshots of the upcoming GSTR-1/IFF improvements & enhancements, please click here

            Thanking you,
            Team GSTN.

            What is “penalty” u/CGST/SGST Act ? What are general disciplines followed while imposing penalties?

            Posted on by Business So Simple in GST, Legal awareness

            Penalty :

            The word “penalty” has not been defined in the CGST/SGST Act but judicial pronouncements and principles of jurisprudence have laid down the nature of a penalty as:


            a) a temporary punishment or a sum of money imposed by statute, to be paid as punishment for the commission of a certain offence;


            b) a punishment imposed by law or contract for doing or failing to do something that was the duty of a party to do.

            General disciplines followed  while imposing penalties

            The levy of penalty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such general discipline is enshrined in section 126 of the Act. Accordingly:-

            a) no penalty is to be imposed without issuance of a show cause notice and proper hearing in the matter, affording an opportunity to the person proceeded against to rebut the allegations levelled against him,the penalty is to depend on the totality of the facts and circumstances of the case,


            b) the penalty imposed is to be commensurate with the degree and severity of breach of the provisions of the law or the rules alleged,


            c) the nature of the breach is to be specified clearly in the order imposing the penalty,


            d) the provisions of the law under which the penalty has been imposed is to be specified.


            Section 126 further specifies that, in particular, no substantial penalty is to be imposed for:-


            a) any minor breach (minor breach has been defined as a violation of the provisions in a case where the tax involved is less than Rs.5000), or


            b) a procedural requirement of the law, or


            c) an easily rectifiable mistake/omission in documents (explained in the law as an error apparent on record) that has been made without fraudulent intent or gross negligence.


            Further, wherever penalty of a fixed amount or a fixed percentage has been provided in the CGST/SGST Act, the same shall apply.

            Judicial updates-09th Feb 2022 (Income tax, GST & Corporate Laws)

            Posted on by Business So Simple in Company Law, GST, Income Tax, Legal awareness

            ITAT Kolkata directs service of notice to Assessee’s Lawyer via email as same could not delivered to Assessee

            Massive Infrastructure Pvt. Ltd. Vs ITO (ITAT Kolkata) dated 02/02/2022

            Revaluation of Land by firm after conversion of inventory into fixed asset – colourable device?

            PCIT Vs Orchid Griha Nirman Pvt. Ltd. (Calcutta High Court) dated 31/01/2022

            *Tribunal agreed with CIT(A) that after conversion of inventory into fixed asset the firm revalued the developed land including construction thereon in order to bring it in line with the current market value to justify the business assistance secured by the firm from the banks to extent of nearly Rs. 250 crores. Therefore, on facts the tribunal concluded that the revaluation was not a colourable.
            Confirmed by HC.

            Failure to issue section 143(2) notice prior to finalising reassessment order makes reassessment proceedings a nullity

            ACIT Vs P & R Infraprojects Ltd. (ITAT Delhi) dated 07/01/2022

            ITAT deletes Addition of Profits from Suppressed of Sales belonging to Firm of director of Appellant Company

            ITO Vs Super Hospitality Services Pvt. Ltd. (ITAT Ahmedabad) dated 31/01/2022

            Interest on Investment made to acquire controlling interest allowable

            Gujarat Nippon Enterprises Pvt. Ltd. Vs ITO (ITAT Ahmedabad) dated 01/02/2022

            ESIC & PF paid before due date of filing income tax return allowable till AY 2020-21

            Dr. B. Lal Clinical Laboratory Private Limited Vs ACIT (ITAT Jaipur) dated 20/01/2022

            Filing of appeal in criminal court against Civil dispute amounts to abuse of process of Court: SC

            Jayahari Vs State of Kerala (Supreme Court of India) dated 25/01/2022

            CIT(E) Order passed without hearing Assessee during COVID-19 violates Principal of Natural Justice

            Madhavi Raksha Sankalpa Vs CIT (Exemptions) (ITAT Mumbai) dated 28/01/2022

            GST Evasion Case: Accused cannot be Detained in Custody Indefinitely- SC

            Paresh Nathalal Chauhan Vs State of Gujarat (Supreme Court of India) dated 01/02/2022

            The Hon’ble Supreme Court of India in Paresh Nathalal Chauhan v. The State of Gujarat & Anr. [SLP (Crl) No. 009458 – 009459/2021, Criminal Appeal Nos.164-165/2022 dated February 01, 2022] granted bail to a person accused of tax evasion. Held that, assessee cannot be detained for indefinite period of time when the maximum sentence for such offence is 5 years and investigation w.r.t. the same is still pending.

            GST Appellate Authority can provisionally release goods & vehicle- HC

            A K Enterprise Vs State of Gujarat (Gujarat High Court) dated 03/02/2022

            ITC available on GST paid under RCM on hiring of buses for transportation of employees

            In re Maanicare System India Private Limited (GST AAR Maharashtra) dated 01/02/2022

            Matter pending before Competent Jurisdiction cannot be transferred for mere Temporary Shift In Residence

            Silpa Shaji Vs Satheesh K.S. (Kerala High Court) dated 01/02/2022

            Bar of Section 69(2) of Indian Partnership Act, 1932 not applicable to Transactions not in the course of business: SC

            Shiv Developers Vs Aksharay Developers (Supreme Court) dated 31/01/2022

            CGST Navi Mumbai Commissionerate busts fake ITC racket of Rs. 10.68 Crore, arrests proprietor of a steel firm (Press release dated 03 Feb 2022)

            Posted on by Business So Simple in GST

            CGST Commissionerate, Navi Mumbai had busted a fake ITC racket of Rs. 10.68 Crores and arrested the proprietor of M/s. Navnit Steels (GSTIN: 27AEXPD3871K1ZV) on Wednesday (February 2, 2022). The firm has engaged in availing and utilizing a fraudulent Input Tax Credit (ITC) on the bogus invoices of Rs 60 Crore, thereby defrauding the government exchequer.

            A team of officers of Anti-Evasion under CGST, Navi Mumbai conducted enquiry against the aforesaid firm. As per the statement of the proprietor, the said firm is involved in trade of raw material and finished goods of Aluminium and steel. However, the investigation revealed that the taxpayer has availed and passed on fake ITC from various non-existing/bogus firms.  The accused has been arrested under Section 69 (1) of the Central Goods and Services Act, 2017 for committal of offences under Section 132 (1) (b) &(c) of the said Act and were produced before the Judicial Magistrate First class, Vashi at Belapur on 03.02.2022 and has been sent on judicial custody for 14 days. This has been stated by the Commissioner, CGST and Central Excise, Navi Mumbai Shri Prabhat Kumar. 

            This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the fraudsters and tax evaders who creating unhealthy competition for compliant taxpayers and defrauding the Government exchequer. As a part of this drive, Navi Mumbai Commissionerate has detected tax evasion of Rs 425 Crore, recovered Rs. 20 crores and arrested 11 persons recently.

                      The CGST Department is using data analysis tools to identify tax evaders. By using data analysis and network analysis, the officers of CGST Mumbai zone have booked more than 625 tax evasion cases, detected tax evasion of Rs. 5500 Crore, recovered Rs. 630 Crore and arrested 48 persons, in the last five months. The CGST department is going to intensify the drive against the fraudsters and tax evaders which are causing unfair competition with honest taxpayers and defrauding the government exchequer of its rightful revenue in the coming days and months.