TAX EVASION NOTICES
GST Council likely to deliberate on online gaming tax, Par panel recommendation on fertiliser
The GST Council is set to discuss various issues in its upcoming meeting, including taxation on online gaming and the recommendation to lower tax on fertilisers by the Parliamentary standing committee. The current GST rate on fertilisers is 5%, while raw materials like Sulphuric Acid and Ammonia face a higher rate of 18%. The council will also review the decision to levy 28% GST on the full value of bets for online gaming companies, which came into effect on October 1, 2023.
Law committee recommends amendment to CGST law to quash retro tax notice
The recommendation, if approved by the council may give relief to a large number of industries including online gaming industry, which was seeking relief from retrospective tax notice. The recommendation may be placed before the GST council and once approved this would pace way for quashing a large number of notices sent to online gaming industry. The law committee has suggested amendment to the Central Goods and Services Tax (CGST) Act, 2017 via the introduction of a new Section 11A in the legislation.
Retro tax demand on online gaming companies may be quashed
As per the recommendation tax notices in cases where the lower tax was paid due to interpretation of law or lack of clarity can be quashed, people familiar with the development said. The law committee has suggested amendment to the Central Goods and Services Tax (CGST) Act, 2017 via the introduction of a new Section 11A in the legislation.
Duty evasion up to Rs 1 crore may not lead to jail term
India proposes to decriminalise provisions in the central excise law, aiming to remove imprisonment for minor duty evasions and reduce penalties. The proposed Central Excise Bill 2024 seeks to modernise provisions, align with GST laws, govern taxation of tobacco and petroleum products, and operate in an automated online mode.
White goods, FMCG imports failing to get custom-fit tag
White goods, chemicals, pharmaceuticals, and FMCG companies face import delays or higher duties as customs authorities scrutinize third-party invoicing at various ports. This practice, used for tax optimization, allows invoicing through a country different from the goods' origin and is permitted under FTAs. However, customs officials suspect abuse of FTA provisions, withholding consignments and denying lower duty benefits at ports like Nhava Sheva. Authorities demand differential duty payments and invoke rules addressing potential duty evasion through third-party invoicing, leading to potential supply disruptions.
IATA boss warns foreign airlines may quit India if taxation issues are not sorted
The chief of the International Air Transport Association (IATA), Wille Walsh, warned that airlines may withdraw from the Indian market if concerns over taxation are not addressed. Several global airline groups including Emirates, British Airways, Lufthansa, Singapore Airlines, and others have received tax evasion notices from the Directorate General of GST Intelligence (DGGI). The notices were related to non-payment of tax on services provided by the airlines to their Indian entities.
Mandatory scrutiny of ITR: Income tax dept reveals the criteria how the ITRs will be selected for the scrutiny
Income tax return: The tax department has released a circular which outlines the criterias and procedure to be followed if a particular income tax return (ITR) is to be selected for scrutiny. These guidelines also includes the procedure and criteria to be followed for section 142 (1) income tax notice.
DGGI launches probe into 'tax evasion' worth Rs 18k cr by agricultural brokerage houses
During a sector-wise analysis of GST data, the DGGI detected evasion by 58 brokerages, engaged in procurement of crops from farmers for businesses and government agencies, and in processing and packaging for exports, said officials. Some of these brokerages were not even registered under GST, despite huge turnover, and action could be initiated against more such entities, they said.
Tax evasion of Rs 730 cr by TMT bar makers detected
All iron and steel items are subject to 18% GST. The Meerut unit of DGGI had received intelligence that several TMT bar makers were filing documents on behalf of non-existent companies naming them as suppliers and claiming input tax credit. The official quoted above said these companies outsourced the transportation of non-duty paid goods from the factory gate to many dealers and recipients, without paying any duty to the authorities.
Real estate cos approach FinMin over GST notices
Authorities had also sent out notices for non-payment of tax on corporate guarantees provided by flagship companies to their subsidiaries, which attracts 18% GST.
Coaching centres face DGGI probe for tax evasion
DGGI is probing potential tax evasion of ₹850 crore by large coaching centres in 2020-21 and 2021-22. Officials suggest misdeclaration of enrolments and non-payment of tax after collection. The investigation, initiated in January 2023, targets numerous coaching centres across India. Around 145 large and mid-sized centres are under scrutiny, including those for medical, engineering, and entrance exams like IELTS and GRE.
Insurers' intermediaries get I-T notices under benami law over alleged fund routing violations
Over the past one week, some companies acting as agents and marketing intermediaries of insurance companies have received notices under the Benami Transactions (Prohibition) Amendment Act, 2016, for allegedly routing funds to sidestep regulations.
SC seeks response from taxman on ₹1L cr notices to e-gaming cos
The show-cause notices were issued after the government clarified that all online games involving betting and gambling, irrespective of skill or chance, will attract 28% GST on full-face value of the bets from October 1, 2023. The government believes some of these firms leveraged the lack of clarity on taxation of "game of chance" and "game of skill" before October 1 and there was a need to have a uniform 28% GST on the full value of bets placed on online gaming platforms.
GST notices of ₹1.45 lakh crore sent out in December for FY18
GST evasion of about Rs 1.51 lakh crore has been detected by central GST officers in the current fiscal, while recovery stands at Rs 18,541 crore as on December 30, against the internal target of Rs 50,000 crore. The finance ministry on Sunday said that since mid-May 2023, a total of 29,273 bogus firms involved in suspected input tax credit evasion of Rs 44,015 crore have been detected.
Taxing times: Why are so many companies getting GST notices?
The tax authorities have been shooting off tax demand notices for several months now. Tax officers sent around 33,000 GST notices to businesses for discrepancies in returns filed and short payment of taxes in 2017-18 and 2018-19 financial years, a CBIC official told ET in early December.
I-T lens on Rs 10,000 crore tax evasion by online sellers; ED show cause notice to Byju’s
The income tax department reportedly uncovered tax evasion of around Rs 10,000 crore over three years by online retailers using social media platforms like Instagram and Facebook. This and more in today’s ETtech Morning Dispatch.
I-T pegs tax evasion by insurance companies, intermediaries at ₹30,000 cr
The department is in the process of sending tax demand notices to these entities to recover the dues, people aware of the details told ET. The amount could increase once interest and penalties are levied, they said. "We are sending demand notices along with penalty and interest to companies separately and they will get the mandated time to respond to them or contest them," a senior official said.
GST Evasion Notice: DGGI seeks Rs 3k crore from ICICI Lombard and other insurance cos
The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued notices to several insurance companies, including ICICI Lombard, seeking approximately Rs 3,000 crore in unpaid taxes. The notices state that these companies did not pay GST on reinsurance premiums despite receiving commissions from co-insurance companies.
SC stays Karnataka HC order of Gameskraft tax evasion case
The Supreme Court stayed the Karnataka High Court’s judgment that overturned the Directorate General of GST Intelligence’s order imposing a Rs 21,000 crore goods and services tax demand on Bengaluru-based online gaming firm Gameskraft. Meanwhile, the bench led by Chief Justice DY Chandrachud also asked parties to file common compilations of judgments and other related documents.
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