Why Input Tax Credit should be Abolished
A news report in Times of India dated 30 June 2019:
₹6,000cr GST scam busted in Gujarat
The state goods and services tax (SGST) department on Saturday unearthed the largest ever fake billing scam in Gujarat after GST’s implementation. The department has initiated a rigorous probe against some 282 firms involved in the scam wherein fake bills of Rs 6,030 crore have been generated to fraudulently claim input tax credit. Data shared by SGST department shows these bogus invoices were used to evade taxes of Rs 910 crore.
These bogus bills generated were used to fraudulently claim input tax credit without actual movement of goods.
There may be many more GST Scams running in to thousands of crores all over India which have not been caught so far.
The root cause is Input Tax Credit system in GST. The initial objective was to tempt maximum number of businesses to register under GST which has been achieved.
Therefore government should seriously consider removing the provision of Input Tax Credit. The GST rates should be reduced after removing input tax credit as has been done for Restaurants.
Another advantage will be that filing of GST returns will become very simple as there will not be any need to match the invoices for claiming input tax credit.
Local Circles are requested to take up this issue with FM and GST Council. more
₹6,000cr GST scam busted in Gujarat
The state goods and services tax (SGST) department on Saturday unearthed the largest ever fake billing scam in Gujarat after GST’s implementation. The department has initiated a rigorous probe against some 282 firms involved in the scam wherein fake bills of Rs 6,030 crore have been generated to fraudulently claim input tax credit. Data shared by SGST department shows these bogus invoices were used to evade taxes of Rs 910 crore.
These bogus bills generated were used to fraudulently claim input tax credit without actual movement of goods.
There may be many more GST Scams running in to thousands of crores all over India which have not been caught so far.
The root cause is Input Tax Credit system in GST. The initial objective was to tempt maximum number of businesses to register under GST which has been achieved.
Therefore government should seriously consider removing the provision of Input Tax Credit. The GST rates should be reduced after removing input tax credit as has been done for Restaurants.
Another advantage will be that filing of GST returns will become very simple as there will not be any need to match the invoices for claiming input tax credit.
Local Circles are requested to take up this issue with FM and GST Council. more
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We make so many rules but do not make any proper machienery for its implementation.More over punishment is very time consuming and very light. more
Jul 16
This is the method penetrated by Congress and it's Alliances while on Rule. JUDICIARY side-tracked from Constitutional Mandates. POLICING diluted and cornered. CORRUPTION planted in all Sectors. Ultimately Businessmen overriding many SINCE THESE PARTIES ARE DEPENDANT ON FUNDING BY BUSINESS SECTOR.
Reforms are must and fast yo REDRESS these Challenges over Constitutional Rule. more
Reforms are must and fast yo REDRESS these Challenges over Constitutional Rule. more
Jul 16
More tax and more regulations by the government brings on the corruption. Clearly socialism brings on more of that. Solution lower taxes and regulation to achieve the good and in turn the free market will take care of it. more
Jul 08
Indians are good to find holes in all govt policy's. Our law makers are good to frame policy with holes. India is great. more
Jul 03
Everyone know the Law Loopholes. SC appears to be unknown. THIS IS THE PITIFUL STATURE more
Jul 03
Input Subsidy if Applied on Sale Invoice , miscarry COULD BE PERMANENTLY ARRESTED IF THE PROOF OF PURCHASE PAYMENT IS ANNEXED. more
Jul 03
I don't agree with Mr. Pande on abolition of ITC which is a good system and effective control mechanism but cheat traders misuse it. So there has to be effective tool to identify such criminal offenders. Since GST is in its infant stage, such scams are possible by the offenders who are dishonest towards the nation's objective but these must be scrutinised to threadbare plugging all loopholes. I suggest there should be no ITC for traders who sell to individuals finally who are not registered under GST. For example, in realty sector, how individuals can claim ITC as they buy plots/houses/flats for their personal use. So GST needs to be reduced to the minimum in the related items as there will be no ITC. However, if an individual buys more than 2, (as we need to boost this industry as well) then he needs to be charged at a higher level. I believe in this, linkage of Aadhar card reference of the individuals can prevent misuse of ITC. I suppose, linkage of Aadhar card reference for all transactions, will mop up GST collection and all other tax revenues. Supreme court must modify its earlier ruling on this matter and government must tighten Aadhar data base by encrypting it so that it is breach free, replacing all other cards provided to the citizens. Also, all products must be covered by GST with simplified filing of returns and rationalised tax slabs limited to 2. This will go in long way for a successful implementation of GST more
Jul 02
