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The Hindu
6 days ago
- Business
- The Hindu
GST notices to traders: A fiasco that could have been avoided with feet on ground
The Goods and Services Tax (GST) notice fiasco in Karnataka, which ended with the intervention of Chief Minister Siddaramaiah, could have been avoided with proper planning and feet on ground by Commercial Tax officers, senior department officials feel. Before issuing notices to traders, a spot visit to assess the nature of business should have been undertaken by the officials, multiple officials in the department said. Nature of business 'When traders were issued notices, officials did not know the nature of businesses in a large number of cases. They had not visited the business premises to conduct a survey. It was a thoughtless and faceless exercise, which embarrassed the government,' a senior official explained. 'There was a lack of clarity and specificity with respect to the nature of supply — whether it was goods or services.' Businesses with a turnover in trade of goods above ₹40 lakh and of services above ₹20 lakh have to be registered under the GST. As many as 18,000 notices have been issued across the State based on the information received by the Service Analysis Wing (SAW) after it sought details from the UPI platforms. Officials said that while details were received from three platforms, transactions in many others had not been received, which meant the exercise was not comprehensive. Goods not under GST As a result, another official pointed out, notices ended up being issued to vendors selling milk, vegetables, flowers, meat, and fruits, all of which are exempted goods under the GST. 'The notices scared the traders with a big tax demand and were issued on mere assumptions, without ascertaining the nature of receipts. Attempts were not made to ascertain whether receipts actually pertain to business transactions, or whether they were unrelated to business, or related to exempted goods.' The notices, if questioned in the High Court, could be struck down, sources said. Higher targets? Multiple officials with whom The Hindu spoke also referred to a very 'high and unreasonable' target set by the State government for the GST collections, which prompted the department to look towards newer sources of revenue or widen the tax base. By tapping the UPI net, the government was expecting at least ₹1,000 crore to ₹1,500 crore revenue, sources said. While the department collected about ₹1.02 lakh crore during 2024-2025, the government has set a target of ₹1.20 lakh crore for 2025-2026. 'Normally, the revision of the target is based on the GDP growth. Targets in the past were increased, which were double the rate of growth of the State's GDP. This time, the target has been raised by 17%, which we believe is very difficult to attain,' another senior official said. Concurring with his view, an officer said, 'The last fiscal had ₹1.02 lakh crore, which included about ₹6,000 crore from the IGST input tax credit reversal, which had not been claimed at all. This will drop down to about ₹1,000 crore this year. If this is considered, the revenue target has been increased by over 20%.'
The Hindu
21-07-2025
- Business
- The Hindu
GST notice: State and Centre have to agree on reprieve for small traders
Small traders and businessmen, who have come under the lens of the Commercial Taxes Department over the non-payment of Goods and Services Tax (GST) over the last four years for UPI transactions, can get a reprieve only if the State and the Central governments agree to a solution. While the department is learnt to have issued notices to over 10,000 businesses based on the UPI transactions, it is difficult for the government to waive the penalty/interest or the tax burden, department officials say. Deputy Chief Minister D.K. Shivakumar claimed that the number of notices could be about 14,000, and said that the State would write to the Centre to withdraw notices, and blamed the BJP for the current problem. 'Both governments have to decide in the GST Council on the future course of action since both the State and the Central GST are involved,' an official said, adding that trade bodies and associations could petition the government over the inability of traders to pay tax retrospectively. Based on information from PhonePe and Paytm, traders offering goods and who have exceeded ₹40 lakh in UPI transactions per annum and those offering services and who have exceeded ₹20 lakhs in transactions per annum have been issued the notices. Sources said that Google Pay transactions are yet to be assessed. 'Because the tax liability can be flagged for the previous four years, the notices have been issued from 2021-2022 and till January 2025 when the department received data,' a senior Commercial Tax official explained. On Monday, officials also interacted with anxious small traders, who came to clarify their doubts, and explained the reason behind issuing the notices. 'Notice is a mode of communication or an intimation. Traders need not be worried. If exempted goods were handled, the notices will be withdrawn. The department will hear from traders and businesses will be assessed before the tax demand is issued,' Joint Commissioner of Commercial Tax Meera S. Pandit told the audience. The exempted goods include vegetables, fruits, flowers, milk, unbranded or unpacked foodgrains, handicrafts, petrol, diesel, and liquor. If the trader is selling other than exempted goods in his shop, the GST will apply to those goods only, the department has clarified. On the 18% GST demand raised in the notices, the official clarified: 'Based on the documents provided on the transactions and other information, the final tax demand could come down. The demand can only be lowered but not increased when the demand order is issued'. She pointed to similar exercises being carried out in Gujarat, Tamil Nadu, and Andhra Pradesh. 'Though the notices have asked the traders to respond within seven or 10 days, sufficient time would be provided. Three reminders will be sent and officials will also call the trader on phone. The assessment will be based on the best judgment and closer to reality if documents cannot be provided. The tax demand is not to trouble anyone or dip into profits,' Ms. Pandit said. Meanwhile, after the outcry by traders, the department has changed the format for issuing notices. While initial notices provided details of transactions, possible tax liabilities at the rate of 18% GST, interest and penalty, currently notices are being issued to traders, intimating them of transaction of over ₹40 lakh, which requires registration under the GST regime.
The Print
09-07-2025
- Business
- The Print
Rs 17-cr GST fraud unearthed in UP's Bhadohi; FIR filed against firm owner
According to Superintendent of Police Abhimanyu Manglik, Singh registered a firm under the name 'M/s Jogendra Enterprises' in Khamariya in the Aurai area on December 22, 2024. Police said on Tuesday that the accused, Jogendra Singh, allegedly used forged documents to obtain a GST registration and conducted transactions worth nearly Rs 1 billion across 10 states. Bhadohi (UP), July 8 (PTI) Authorities in Uttar Pradesh's Bhadohi district have unearthed a major GST fraud involving fake documents and tax evasion of more than Rs 17 crore. Using this registration, the firm issued invoices totalling Rs 96.53 crore to 10 traders. However, it failed to pay GST dues amounting to Rs 17.57 crore. Assistant Commissioner of Commercial Tax, Manoj Kumar Agrawal, lodged an FIR after a field inspection revealed no physical existence of the firm. The location listed in the registration showed no such business activity, and the electricity bill was found to be in a woman's name. The PAN card used for registration was also found to be forged. Following the discovery, the GST number and registration of the firm were cancelled on July 2, Manglik said. The FIR has been registered at the Aurai police station under relevant sections of the Bharatiya Nyaya Sanhita (BNS). PTI COR KIS RHL RHL This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Time of India
02-07-2025
- Business
- Time of India
Chhattisgarh tops nation with 18% GST growth, CM Sai directs to intensify measures against tax evasion
RAIPUR: Chhattisgarh has recorded the country's highest growth rate in Goods and Services Tax (GST) collections, registering an impressive 18% increase over the previous fiscal year. In a review meeting held at Secretariat on Wednesday, Chief Minister Vishnu Deo Sai instructed the Commercial Tax (GST) department to intensify measures against tax evasion and ensure prompt recovery of dues. Highlighting the importance of tax compliance, Chief Minister stated that public revenues are vital for the development of the nation and the state, and therefore all taxpayers must pay their dues honestly. He warned that strict action would be taken against entities resorting to GST fraud, bogus billing, dual accounting practices, or misapplication of tax rates to gain undue advantages. Officials informed the Chief Minister that during FY 2024–25, Chhattisgarh mobilised a total tax revenue of Rs 23,448 crore from GST and VAT, accounting for nearly 38% of the state's own tax collections. The state's performance has positioned it at the forefront of GST growth nationwide. Sai lauded the department's initiatives to streamline processes. He especially commended efforts to reduce the average time for GST registration from 13 days to just 2 days, significantly enhancing ease of doing business. Chief Minister also reviewed recent enforcement actions, including recovery of evaded taxes. Officials reported that targeted drives and technology-led monitoring have contributed to consistent growth in collections. GST offices have been established across all 33 districts, improving transparency and timely delivery of taxpayer services.
