Major Development! Alarm Grows as GST Authorities Release Demand Notices Amounting to ₹1.45 Lakh Crore

GST authorities issued demand notices amounting to ₹1.45 trillion to approximately 1,500 businesses in December. The notices were prompted by discrepancies in annual returns and input tax credit claims for the financial year 2018, officials stated. 

This surge in notices is attributed to the deadline for issuing notices for the 2017-18 period, which was December 31, 2023. A senior official mentioned that the ₹1.45 trillion figure includes penalty and interest.

Moreover, the insufficient collection of taxes from cases of evasion resulted in a substantial issuance of notices. In the ongoing fiscal year, GST officers identified a total GST evasion of approximately ₹1.51 lakh crore. However, the actual recovery by December 30 amounted to only ₹18,541 crore. This fell significantly short of the internal target set at ₹50,000 crore, as indicated in the report.

The official mentioned that in the fiscal year 2017-18, a total of 72.5 lakh GST returns were filed, but only a small fraction underwent scrutiny for potential tax underpayment.

By December 30, about 48,000 GST returns from the years 2017-18 and 2018-19 were chosen for scrutiny due to identified discrepancies or system-generated flags.

Since the deadline for the 2017-18 period has passed, the focus has shifted to the fiscal year 2018-19. Officials anticipate an increase in the number of notices in the upcoming days.

Moreover, the government has extended the deadline for issuing demand notices related to discrepancies in returns for the years 2018-19 and 2019-20 to April 30, extending it from the initial deadline of March 31.

In a recent announcement, the government disclosed that GST officers have uncovered 29,273 fraudulent firms involved in fake Input Tax Credit (ITC) claims, amounting to ₹44,015 crore in the eight months leading up to December 2023. This initiative against fake registration has safeguarded revenue worth ₹4,646 crore.

During the October-December quarter, 4,153 bogus firms suspected of ITC evasion totaling around ₹12,036 crore were detected. The Central GST Authorities identified 2,358 of these fraudulent firms.

Also Read: Tax Calendar 2024: Important deadlines for income taxes in January, February, and March

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