GST intelligence wing nets Rs 70 cr within a month

NAGPUR: After adopting a passive stance, and letting taxpayers adjust to the new tax system initially, the central GST (CGST) department has now set up an intelligence wing, leading to major recoveries within a month of its formation.

The Nagpur office of the directorate general of GST Intelligence (DGGSTI) has recovered tax to the tune of Rs 70 crore from different assessees apart from unearthing substantial duty evasion.

A major contribution came following a raid on a Pandhurna-based cigarette manufacturing unit, which had its registered address at a flat in Nagpur. It is learnt that following the action a week ago, tax sleuths have been able to recover close to Rs 25 crore from promoters of the cigarette company. Another Rs 10 crore odd have been recovered from two different actions held in Nagpur zone too, said sources. There have been smaller recoveries too in the range of Rs 3 crore to Rs 4 crore

The Nagpur area of DGGSTI covers districts in Vidarbha, Khandesh and Aurangabad regions of Maharashtra, giving it jurisdiction across a major part of the state. Another major recovery of around Rs 27 crore was from Videocon Industries at Aurangabad. However, this was not a case of evasion as such. Even as the company had booked its liability towards the tax, it was not in a position to pay GST owing to an internal crisis. The amount has finally been recovered, a source said.

Investigations are under way in the cigarette factory case. The unit at Pandhurna, in neighbouring Madhya Pradesh, was run by Aroma Productions Private Limited, whose registered office is located at a residential flat in Nagpur. The flat is at present occupied by a tenant and the occupants claim to have no links with the company’s promoters. Another company, Rabia Properties, under scanner in the Adarsh flats case is also located at the same address.

Officials said this was a case of clandestine removal of goods from the factory. Cigarettes come under physical control. This means an official has to be present when goods are taken out of the factory gate. The department is informed about the removal of goods so that the officer is also present at that time.

In this case, it was found that the manufacturing of cigarette took place in the night and the packets were removed without informing the officer to avoid spot inspection. 

This helped the company avoid paying GST, which in turn helped it to keep prices much lower. With cigarettes classified as sin product under GST regime it attracts a hefty tax. The basic duty is at 28% apart from which there is a compensation cess of 5%. Another over Rs 4,400 in all is charged on every 1,000 sticks of cigarettes. If the duty is evaded, it leads to a major difference in the price.

Source- Times of India.

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