Latest news with #CentralGoodsandServicesTax
Indian Express
2 days ago
- Business
- Indian Express
Trader held for availing ITC worth Rs 15.19 cr by submitting fake invoices
A textile trader has been arrested by the Directorate General of GST Intelligence (DGGI) in Surat for allegedly submitting fake invoices of Rs 100 crore to avail Input Tax Credit worth Rs 15.19 crore. According to DGGI sources, the accused, arrested on Friday has been identified as Yatin Dudhat, a resident of Varachha, who runs textile business by the name of Dudhat International in Surat. Dudhat allegedly received fake invoices from different firms without any supply of goods. The officials had earlier raided his office and business place in Surat and recovered several incriminating documents. Dudhat has violated the provision of sections of 132 of Central Goods and Services Tax, Act, 2017, an official said. Sources said that the name of Dudhat cropped during a probe following the arrest of Chetan Patoliya, proprietor of Kunj Fashion, Surat. On Saturday, Yatin Dudhat was produced before Chief Judicial Magistrate court of Judge R M Kalotara. He was sent to 14 days judicial custody at Surat Central jail by court. DGGI sources added, they had carried out a search operation at Kunj Fashion, on May 2. During investigation, the officials found Patoliya's involvement in availing the Input Tax Credit of around Rs 12 crores, with the help of fake invoices of sales and purchase of goods. Patoliya in his statements to DGGI had mentioned that he had passed on (sold) ITC to different firms – including Infinity Impex, Salton Impex, Manya Overseas and Shreeji exports, without supply of goods – in Surat. The DGGI is currently carrying out a probe in this case and are collecting the details of the firms that had received ITC from Kunj Fashion and Dudhat International.
Hans India
23-05-2025
- Business
- Hans India
PMI in India Hails Track & Trace (T&T) Mechanism Roll Out in the country Aimed At Curbing Illicit Tobacco Trade
India, 2025: Philip Morris International Inc.'s (PMI) India affiliate, IPM India, today hailed India's decision to roll out pack-level Track and Trace (T&T) as a game-changing move against illicit tobacco trade and a major step towards modernizing regulatory enforcement. Approved under Section 148A of the Central Goods and Services Tax (CGST) Act, this reform marks a bold move to protect revenue, tighten enforcement, and bring greater transparency and accountability to India's tobacco market. Starting with cigarette packs, the government has chosen a smart, high-impact strategy to curb illicit tobacco trade. The proposed mechanism may incorporate Unique Identification Markings on packs, which will enable enforcement agencies to easily distinguish tax-paid products from illegal ones—strengthening oversight across retail shelves, supply chains, and field operations. The proposed T&T mechanism will be a practical, real-world solution designed for immediate impact—and a critical foundation for a more modern, technology-driven regulatory system. With operations across multiple markets, PMI brings deep, practical experience from some of the world's most advanced T&T systems & implemented it voluntarily in 140+ markets worldwide. In the European Union, PMI operates under the Tobacco Products Directive, where every pack is digitally tagged and monitored through the supply chain. Similar systems have been successfully deployed in UK, Russia, Jordan, Gulf Cooperation Council (GCC), where PMI has worked with national authorities to build scalable, locally adapted traceability frameworks. Across all markets, the outcome have been consistent: better visibility, stronger compliance, and measurable reductions in illicit trade. Illicit tobacco trade isn't just a revenue problem—it's a public health threat, a blow to lawful businesses, and fuel for the informal economy. Track and Trace is a proven tool for modernizing supply chains and enforcement. By clearly separating legal from illegal products, it not only protects consumers but also secures tax collections and promotes a level playing field for compliant operators. Emphasising the need for a stringent T&T mechanism, Navaneel Kar, Managing Director, IPM India said, 'This is a landmark reform and a visionary step towards a cleaner, more modern, and a transparent market. With thoughtful execution, India's T&T system can reshape the fight against illicit tobacco trade—boosting public trust, strengthening government revenues, and accelerating the modernization of enforcement practices. Eliminating illicit tobacco trade has been a longstanding priority for us and remains integral to our broader efforts in driving operational excellence and building a sustainable future. PMI has long invested in technologies that protect supply chain integrity globally, and we are committed to partnering with the Indian government to make this initiative a success.'India's move to ratify the illicit tobacco trade protocol, also aligns with international standards. T&T is a core requirement under Article 15 of the WHO Framework Convention on Tobacco Control (FCTC) and the 2014 Protocol to Eliminate Illicit Trade in Tobacco Products. As one of the world's largest tobacco markets and a key transit hub, India's leadership sends a powerful global signal toward modernization and digital oversight. Implementation of the proposed T&T systems should allow interoperability, facilitate innovation and the optimization of enforcement activities along with independent, cost-effective solutions that do not disrupt the manufacturing and distribution environment. But technology alone won't deliver results. Collaboration is essential. Effective systems require close cooperation between governments, industry players, and technology providers. Solutions must be flexible enough to reflect India's enforcement realities and dynamic enough to stay ahead of evolving risks. India's T&T mechanism rollout is just the beginning. It sets the stage for a broader modernization of supply chain regulation—expanding across more products, deeper distribution layers, and even into other sectors facing similar challenges. With smart partnerships and sustained innovation, India can build one of the world's most resilient, transparent, and future-ready regulatory ecosystems.
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Business Standard
21-05-2025
- Business
- Business Standard
SC rejects review plea in Safari Retreats case, upholds ITC for leasing
The Supreme Court on Tuesday dismissed the Finance Ministry's review petition seeking to overturn its landmark ruling in the Safari Retreats case, which had allowed commercial real estate firms to claim input tax credit (ITC) on construction costs for properties meant to be rented out. A two-judge bench comprising Justices Abhay S Oka and Sanjay Karol passed the order on May 20, noting that there was 'no error apparent on the record' in its earlier judgment delivered on October 3, 2024. 'In the interest of justice, the defects raised by the Registry are waived. Delay condoned,' the court stated. 'Review Petition is dismissed.' In the Union Budget 2025, presented on February 1, the Finance Ministry had introduced a retrospective amendment to the Central Goods and Services Tax (CGST) Act through the Finance Bill. The amendment replaced the phrase 'plant or machinery' with 'plant and machinery' under Section 17(5)(d), effective from July 1, 2017. This legislative change sought to restrict ITC claims on construction costs for leased properties, thereby nullifying the effect of the Safari Retreats ruling through statutory amendment. Abhishek A Rastogi, founder of Rastogi Chambers, who represented multiple taxpayers before the Supreme Court in similar matters, called the court's decision a strong endorsement of taxpayer rights. 'The dismissal of the review petition filed by the revenue in the Safari Retreats case is a significant affirmation of the legal position that input tax credit cannot be denied merely on the ground of its use in the construction of immovable property, particularly when such construction is intended for further business use such as leasing,' he said. 'The Supreme Court's original decision had rightly emphasised the functionality and essentiality tests to determine credit eligibility under the GST regime. With the review now conclusively dismissed, the matter tilts strongly in favour of the taxpayers.' Rastogi added that restrictive interpretations of GST credit provisions undermine the core principle of seamless ITC under the GST framework. Rajat Mohan, senior partner at AMRG & Associates, welcomed the judgment but raised concerns about the legislative path taken by the government. '…The government's attempt to nullify the ruling through a retrospective legislative amendment—changing 'plant or machinery' to 'plant and machinery'—undermines judicial finality and introduces significant uncertainty. It may open the floodgates for litigation and erode taxpayer confidence. The industry now stands at a crossroads: while the judgment offers clarity and relief, the retrospective amendment, if enacted, could dilute its benefit. Businesses must carefully monitor future legislative developments before relying on this ruling for ITC claims on leased properties,' said Mohan. He warned that the retrospective amendment risks undoing the legal clarity established by the court. The case originated with Safari Retreats Private Limited, a company engaged in constructing and leasing shopping malls. The firm had claimed ITC on goods and services used in the construction of these commercial properties. Tax authorities denied the claim, citing Section 17(5)(d) of the CGST Act, which restricts ITC on immovable property construction. The Supreme Court's October 2024 ruling in favour of Safari Retreats distinguished between the use of property 'on own account' and for business purposes such as leasing—allowing credit in the latter scenario.
Time of India
19-05-2025
- Business
- Time of India
Supreme Court allows 10% GST appeal pre-deposit via credit ledger in major relief for businesses
In a matter that will have huge implications for businesses across the country, the Supreme Court on Monday upheld a Gujarat High Court decision that allowed the companies to make mandatory 10% pre-deposit via the Electronic Credit Ledger (ECL), which contains accumulated input tax credit (ITC), for filing an appeal under the Goods and Services Tax law . Dismissing the revenue's appeal, in the case of Yasho Industries vs Union of India, a bench led by Justice B.V. Nagarathna confirmed the HC order holding the pre-deposit payments from ECL was valid and sufficient compliance under Section 107(6)(b) of the Central Goods and Services Tax (CGST) Act, 2017. Mumbai-based chemical manufacturing and export company Yasho Industries had deposited the required 10% of the disputed tax amount of Rs 3.36 crore through ECL using Form GST DRC-03, but the department refused to consider the credit ledger payment as valid. This was challenged by the company before the HC, which ruled in its favour. 'The Supreme Court's verdict is a significant win for taxpayers, especially small and medium enterprises who often struggle with cash flow constraints during litigation,' said Abhishek A Rastogi, who represented the company. 'By allowing the use of the ECL for mandatory pre-deposits, the judgment removes a major financial burden and simplifies the appellate process by removing narrow interpretation. This decision will now ensure that taxpayers are not forced to pay in cash when legitimate input tax credit is available', added Rastogi. Saurabh Agarwal, Tax Partner, EY, too echoed Rastogi's view, saying what this judgment essentially does is give a much-needed breather to industries that have been struggling with their cash flow. 'Right now, if a company is in a dispute and needs to make a pre-deposit, it often means shelling out actual cash, even if they have a good amount of GST credit lying in their credit ledger. This really leads to significant working capital blockages,' he said. 'This new ruling, by allowing them to use their existing credit to make these pre-deposits, will free up their cash. Plus, if they eventually win their case, they won't have to go through the lengthy process of claiming a refund, as the adjustment would already be within their credit ledger. It's a win-win in terms of immediate cash flow and avoiding future hassles,' he added.
India.com
08-05-2025
- Business
- India.com
GST Fraud Worth Rs 7.85 Crore Busted In South Delhi, CA Arrested
New Delhi: In a major crackdown, a Central Goods and Services Tax (CGST) team has uncovered a fraud on a large-scale involving fraudulent input tax credit (ITC) claims amounting to nearly Rs 7.85 crore by a South Delhi-based chartered accountant who has been arrested, it was announced on Thursday. Investigations revealed misuse of over 80 GSTINs (Goods and Services Tax Identification Numbers), mainly in the Palam/Dwarka area, linked to the chartered accountant's email IDs and contact numbers, according to a Finance Ministry statement. A core group of 31 GSTINs engaged in circular trading was identified, with no actual supply of goods or services. According to the ministry statement, search proceedings were conducted at 12 premises, and multiple firms were found non-existent. During searches, several electronic devices relevant to investigation were seized, and statements of the relevant people were recorded, the ministry informed. Multiple taxpayers admitted to having been relying entirely on the chartered accountant for GST filings, with login credentials and filings centrally controlled by him. "The offences committed by the accused are covered u/s 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which is cognizable and non-bailable offence under Section 132(5) and punishable under Section 132(1)(i) of the Act ibid," said the Ministry. "Accordingly, the said chartered accountant was arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on 07.06.2025, who remanded him to judicial custody for 14 days till 21.05.2025," it informed. The case highlights a systemic abuse of the GST framework through impersonation, credential misuse, and collusive circular trading. The Finance Ministry further stated that investigations were going on under the CGST Act, 2017, to uncover the full scale of the fraud and identify all beneficiaries of the ineligible input tax credit.
