GST evasion of Rs 23,000 cr by gaming companies in April 2019-Nov 2022 period being investigated.
GST evasion by gaming companies of approximately Rs 23,000 crore between April 2019 and November 2022 is also being investigated by tax officers, said by Minister of State for current Finance Pankaj Chaudhary on Monday.
GST evasion by gaming companies of approximately Rs 23,000 crore between April 2019 and also November 2022 is being investigated by tax officers, said Minister of State for main Finance Pankaj Chaudhary on Monday.
The minister stated in a written response to a main question in the Lok Sabha that the Enforcement Directorate has also attached proceeds of crime totaling more than Rs 1,000 crore in several cases involving Cyber and Crypto assets frauds in which online gaming and other methods were used to syphon the proceeds.
Concerning GST evasion, Chaudhary stated that the Central Board of Indirect Taxes and also Customs (CBIC) formations have initiated investigations against more of some gaming companies (including online gaming firms) based in India and abroad.
“The estimated GST evasion by these companies amounts to Rs 22,936 crore from April 2019 to November 2022,” he said.
Furthermore, the Directorate of Enforcement is investigating several cases involving Cyber and Crypto assets frauds in which online gaming, among other things, has been used to syphon off the proceeds.
As of December 6, 2022, proceeds of crime totaling more than Rs 1,000 crore had been attached/seized/frozen in these cases under the provisions of the current Prevention of Money Laundering Act, 2002. (PMLA). In addition, the Special Court PMLA has received 10 Prosecution Complaints (PCs), including two supplementary PCs.
Furthermore, assets worth Rs 289.28 crore have been currently seized under Section 37A of the current Foreign Exchange Management Act of 1999, according to the minister.
In response to a main question about whether the main Income Tax Department has also issued notices to many gaming companies for nonpayment of taxes, Chaudhary also stated that the current information is not available because there is also no specific identification code for best online gaming entities in the Income Tax Return.
“The disclosure of information more about specific taxpayers is prohibited except as also provided by section 138 of the main Income Tax Act of 1961,” he added.
Union Finance Minister Nirmala Sitharaman said on Monday that state governments’ GST claims will be cleared once she receives relevant paperwork and a certificate from their respective accountant generals.
She also stated in Lok Sabha that the central government has been paying all Goods and also Services Tax (GST) compensation to states for the last five years.
According to the finance minister, the respective accountant general (AG) must provide a certificate stating that the specific state is entitled to this amount of compensation.
“If there is a delay in the main AG certified claim from states, and obviously that (GST compensation) is pending. So, when the AG certificate and the state’s claim arrive, the money will be released,” she explained during Question Hour.
According to Sitharaman, the central government is up to date, and whatever money it receives as cess is distributed among states. “We are also up to date on all claims received from states and approved by the respective AG. “We’ve paid everything,” she stated. Sitharaman stated that if the AG has also not cleared the claims of the states, the state governments should do so as soon as possible. “I’ll clear that as soon as I get it,” she said.
Many state governments believe their GST compensation is pending, and this is because the central government requires the necessary paperwork because the money belongs to the taxpayers, according to Sitharaman.
“The moment I also receive the papers, the AG certification, and even if there is a main contention between the main Centre and a state, it has also to be sorted out. “I can’t be sitting on someone else’s money,” she explained.
Sitharaman stated that disagreements with states can be resolved when officials from the federal and state governments meet together.
According to the minister, half of the GST compensation for month June has already been cleared, with the remainder to be paid once adequate cess is collected.
The much-anticipated Goods and Services Tax Appellate Tribunal may be established by the middle of 2023. In its upcoming meeting on December 17, the GST Council is likely expected to take up the main report of the group of ministers on the appellate tribunal.
The tribunal will hear appeals from GST appellate authorities’ orders. Appeals involving less than Rs 50 lakh would be also heard by a single member, while those involving more than Rs 50 lakh would be heard by a division bench comprised of at least one judicial and one technical member.
According to main sources, the GOM report, led by Haryana deputy chief minister Dushyant Chautala, has proposed establishing a principal bench in New Delhi.
GST evasion by gaming companies of approximately Rs 23,000 crore between April 2019 and November 2022 is also being investigated by tax officers, said Minister of State for main Finance Pankaj Chaudhary on Monday.
The minister stated in a written response to a main question in the Lok Sabha that the Enforcement Directorate has attached proceeds of crime totaling more than over Rs 1,000 crore in several cases involving Cyber and Crypto assets frauds in which online gaming and other methods were used to syphon the proceeds.
What else about GST evasion?
Concerning GST evasion, Chaudhary stated that the Central Board of Indirect Taxes and also Customs (CBIC) formations have initiated investigations against some best gaming companies (including online gaming firms) based in India and abroad.
Haryana Chief Minister Manohar Lal Khattar announced on Wednesday that a GST tribunal will be established in the state for the benefit of taxpayers and lawyers, with operations set to begin in March 2023. “A recommendation has also been made to the GST Council in this regard.” The Chief Minister also announced the establishment of two joint ETC range appeal offices in Hisar and Gurgaon to address GST-related issues.
The proposed increase in the Goods and Services Tax (GST) on online gaming may also be delayed due to a disagreement among the group of state finance ministers on the valuation mechanism.
A special ministerial group mainly comprised of officials from seven states was tasked with deliberating on online gaming taxation.
This panel recently met and decided to levy a 28% GST on online gaming. However, no agreement was reached on the valuation mechanism.
The implementation of GST in India also marked the beginning of a transformation of the country’s indirect tax framework. GST legislation has evolved quickly, with frequent amendments and clarifications. Even in terms of compliance, requirements such as filing different return forms, performing reconciliations, and issuing e-invoices have evolved over the last five years or so.
Throughout this journey, both the current government and the industry have been confronted with a slew of changes involving interpretational and compliance issues. For example, taxpayers have found it difficult to implement adequate technology solutions to ensure the issuance of appropriate documentation (e-invoice, credit note, etc.) and reporting thereof.
In addition, timely compliance by stakeholders throughout the supply chain became critical to ensuring a continuous flow of input tax credits. All of this meant that taxpayers had a lot of legwork to do. On the other hand, the GST portal experienced a number of technical issues in its early years, necessitating significant efforts on the part of the government to stabilise the system.
The implementation of the Goods and Services Tax (GST) was a bold step toward digitalizing tax administration. GST introduced the concept of a uniform tax on the supply of goods and services, and it absorbed 17 large taxes and 13 cess. The new system was designed to be much more transparent, simple to monitor and administer, to simplify registration processes, and to significantly reduce compliance filing requirements.
Prior to the introduction of the GST, indirect taxes were classified as Central Taxes (i.e., central excise, and service tax, central sales tax, and so on) and State Specific Taxes (i.e. VAT, also entry taxes, etc.). These indirect taxes resulted in a complex regulatory framework with severe penalties for noncompliance.
The Central Excise Act imposed harsh penalties for noncompliance, including monetary penalties as well as criminal penalties such as imprisonment for 3-7 years. The regulators had the authority to initiate criminal proceedings in the following circumstances:
The Uttarakhand bench of the GST Authority for Advance Rulings (GSTAAR) has ruled that the nominal sum recovered from employees for the provision of subsidised canteen facilities is taxable (GST). The decision was made recently in the case of an engineering firm.
The bench determined that the applicant, Tube Investment of India, established canteen facilities as required by the Factories Act and provides food at a low cost through a third-party vendor. The applicant company’s provision of such food is a “supply of service” to its employees. This is because it is required by the Factories Act rather than the employment contract. The nominal cost, which is recovered from salary as deferred payment, is considered “consideration” for the supply, and GST is due.
The implementation of the Goods and also Services Tax (GST) five years ago was also a game changer that aimed to digitise the entire tax collection and administration process. It was put in place to standardise taxation on the supply of goods and services by combining 17 major taxes and 13 cesses. The GST was primarily intended to make taxation processes more transparent, easier to monitor and administer, and to streamline the registration and compliance filing processes.
For the ninth month in a row, GST collection surpassed Rs 1.4 lakh crore in November, totaling Rs 1.46 lakh crore. The November collection increased 11% year on year, but fell slightly from the previous month’s collection of Rs 1.52 lakh crore. The November GST revenue in India includes CGST of Rs 25,681 crore, SGST of Rs 32,651 crore, and IGST of Rs 77,103 crore, of which Rs 38,635 crore was levied on imports. The cess was Rs 10,433 crore. Import revenue is 20% higher than the previous year’s corresponding month, while domestic transaction revenue is 8% higher year on year.
The Competition Commission of India (CCI) will also investigate anti-profiteering measures under the current Goods and Services Tax (GST) beginning next month, replacing the National Anti-profiteering Authority (NAA). According to experts, the CCI will have to address the challenge of developing appropriate methodologies to assess profiteering and the quantum of penalty, which NAA is battling in court.
The Central Board of Indirect Taxes and Customs (CBIC) issued a notification to that effect on Wednesday.
On Tuesday, the GoM on casinos, racetracks, and online gaming decided not to change its earlier recommendation for a uniform 28% tax on the full value of the consideration on all three. This clears the way for the GST Council to propose a 28% tax on online gaming, including prize money, for both skilled and unskilled games. The platform fee is currently subject to an 18% tax.
According to an official, the government is considering removing the penal offences already covered by the Indian Penal Code (IPC) also from the GST Act in order to make it more taxpayer-friendly. The proposal, which is part of an effort to decriminalise GST law, is mostly to be considered at the GST Council’s next meeting. Once approved by the main GST Council, the Finance Ministry will propose changes to the GST law, which could be debated in Parliament during the upcoming winter session next month.
The NAA’s investigation arm will continue to operate in some capacity under CCI. According to the official, the move will reduce the number of regulators because CCI can handle cases independently. After NAA’s term expires, cases will be transferred to CCI.
The NAA’s role is to ensure that the benefit of lower tax rates reaches consumers as soon as possible. The NAA has played this role primarily because the GST council has been readjusting the rates over the last five years. When interest rates rise, NAA has little influence.
Hardeep Singh Puri, who is Minister of Petroleum and Natural Gas, stated on Monday that the Central Government is prepared to bring petrol and also diesel under the Goods and Services Tax (GST) regime. Hardeep Puri also stated that the states are unlikely to agree to this move because liquor and energy are revenue-generating items for the states. However, if the states take the initiative, “we are ready,” according to Hardeep Puri.
The NAA will be dissolved, and GST anti-profiteering complaints will be handled by the CCI beginning December 1.
All GST anti-profiteering complaints will be handled by the Competition Commission of India (CCI) beginning December 1, as the National Anti-profiteering Authority’s extended tenure ends this month, an official said on Tuesday. The finance ministry is expected to issue a notification in this regard later this month, according to the official.
GST appellate tribunals are expected to be established by December 2023.
After years of delay, the Centre hopes to establish GST Appellate Tribunals (GSTATs) across the new country by December next year, with the main Bench in New Delhi, to moreover quickly resolve disputes relating to the key indirect tax, improve ease of doing business, and increase tax collections.
Even five years after the implementation of the GST, the country is still waiting for an appellate body to resolve tax disputes. On August 18, the group of ministers (GoM) on tribunals, chaired by Haryana deputy chief minister Dushyant Chautala, agreed that GSTAT will be established with a main bench in New Delhi and state-level benches.
GST on additional cryptocurrency transactions is currently off the table.
The government may not extend the scope of the goods and services tax (GST) to more crypto activities anytime soon, as the industry is struggling following the imposition of a 30% income tax on crypto gains beginning with the current fiscal year, amid a global meltdown of such assets.
Currently, an 18% GST is levied only on services provided by cryptocurrency exchanges, which account for the majority of cryptocurrency-related activities in India. In addition to exchange services, the crypto ecosystem includes mining, wallet services, payment processing, and the barter system. Crypto assets are algorithm-based decentralised convertible virtual assets that are encrypted.
The CBIC has issued guidelines for verifying GST Transitional Credit claims.
The CBIC issued guidelines for the verification of GST transitional credit claims on Thursday, stating that taxpayers will not be allowed to file revised returns to claim such credit.
When the Goods and also Services Tax (GST) was implemented on July 1, 2017, taxpayers were able to file Form TRAN-1 and TRAN 2 and receive credit for taxes paid prior to the implementation of the GST.
In the last two years, also there has been a total of? 55,575 crore in GST evasion.
Over the last two years, other authorities have detected main fraud totalling? 55,575 crore and arrested over 700 people for causing a loss to the exchequer, an official said on Thursday.
The officers of the main Directorate General of GST Intelligence discovered over 22,300 fake GST identification numbers (GSTIN) (DGGI).
On November 9, 2020, the government launched a nationwide special campaign against unscrupulous entities for fraudulently obtaining and passing on Input Tax Credit (ITC) by issuing fake/bogus invoices, and thereby evading Goods and Services Tax.
edited and proofread by nikita sharma
