Months after the 1 July launch of the goods and services tax (GST), some big businesses are not filing their returns under the new indirect tax regime and haven’t even registered themselves on GST Network (GSTN), tax officials in the state have found.
The anomalies were discovered about a month ago when the commercial tax department compiled a list of the biggest taxpaying businesses to compare revenue collections in the value-added services (VAT) era and after the switch to GST.
During the process, it was found that tax dues to the tune of Rs170 crore (from the last four months) were to be recovered from businesses that had failed to file their returns.
“The Telangana government has set up an analysis unit as we have migrated from the VAT era to GST. So it needs care, and we also need to keep a watch on dealers. The GST Network only focuses on present data, and we needed a system to know what was happening before this,” said Somesh Kumar, principal secretary (commercial taxes and excise), government of Telangana.
GSTN manages the entire information technology system of the indirect tax regime.
Kumar added that to find out if all big businesses were complying with the law, the commercial tax department compiled a list of the top 100 dealers/businesses for scrutiny of their post- and pre-GST tax data.
After the anomalies were found, the department sent notices to them, seeking an explanation for non-compliance.
“Some of them (big businesses/highest taxpayers) were not even registered under the GST Network, so we got them registered,” Kumar said in an interview.
After the department sent notices to businesses for not filing their returns, more than half of them immediately complied and filed them. Some of them had not filed their returns even after getting registered on GSTN, said Kumar.
Several reasons could be behind the anomalies, said Suresh Surana, founder of RSM Astute Consulting Group. “For example, until now people were only filing provisional returns based on their calculations. There is a situation where people have not paid full amounts, or not paid at all,” he said.
Surana noted data of the pre-GST era is also needed for (state) governments to gleam a full picture. “It (not paying full taxes or non-payment) could be happening across the country. There are also a lot of export-related (refund) claims. So the government is also on the defensive as of now.”
Tax collection in Telangana increased by 18% between April and December 2017 to Rs 30,024.92 crore from Rs 25,390.32 crore in the year-ago period. “It is on expected lines,” Kumar said.