Picking up loopholes in the implementation of the Goods and Services Tax (GST) in Gujarat, the Comptroller and Auditor General of India (CAG) stated in a report that the state government was “hamstrung” in implementing the provisions of the GST. A total of 54,792 existing dealers registered under the GVAT (The Gujarat Value Added Tax) Act could migrate under the GST regime in Gujarat as of September, 2018. These were the persons who either received a provisional certificate of registration or final Registration Certificates (RCs), the auditor pointed out in its report on the “revenue sector” tabled in the Gujarat assembly on Wednesday.
Of the total 5.15 lakh persons registered under GVAT Act in Gujarat as of June 2017, the provisional certificate of registration was granted to 5.02 lakh people. “For non-issuance of provisional certificate of registration, the department stated that dealers might have migrated to other tax authority that is, the Central Goods and Services Tax Department. Further in the case of dealers where final Registration Certificates (RCs) were not issued, the department stated that the state nodal officer had been directed to verify the manual application/details of the dealers and take up the matter with GSTN (Goods and Services Tax Network) authorities, in case final RCs could not be issued due to technical glitches,” the report stated.
The auditor said it noticed “frequent changes were made in the rules and regulations since July 1, 2017, on the recommendations of the GST Council, by the government” which resulted in non-implementation of many procedures laid down in GGST (Gujarat Goods and Services Tax) Act. It said the amendments were made due to the difficulties faced by taxpayers. “As a result of these amendments due to technical issues with the GSTN, the Government of Gujarat was hamstrung in implementing the provisions of the GGST Act as it had limited role in matters related to GSTN,” the auditor said.
Pointing at the scrutiny of returns filed by those who migrated to the GST regime, CAG said that there was a shortfall in filing returns by taxpayers, ranging from 8.39 percent to 31.46 percent, which “needs to be investigated.” The highest shortfall was noticed in the GSTR-1 (details of outward supplies of taxable goods and services offered) during the period from April-June, 2018. Shortfalls were also noticed in filing of other returns like GSTR-3B (a monthly return required to filed by all taxpayers other than composition taxpayers) and GSTR-4 (return for compounding taxable person).
“The commissioner of State Tax in the monthly review meeting for December 2017 had instructed all the 11 divisions to scrutinise returns of the top 300 taxpayers of the respective divisions and submit report thereof. However, the follow up of these instructions were not found on record,” CAG stated adding that there was “laxity in scrutiny of returns” in Gujarat.