Three Kala Amb firms under scanner for tax irregularities
Three firms in the Kala Amb area of Sirmaur district are under scanner for availing and passing Rs 250 crore ineligible input tax credit (ITC) to other taxpayers, officials said on Saturday.
Teams of the State Taxes and Excise department are conducting an inspection in three different locations in Kala Amb, and prima facie it appears that two entities with the support of a third entity have availed and passed on ineligible ITC of Rs 250 crore to other taxpayers, an official said.
These firms are part of a network of about 300 firms spread across five states, which conducted transactions of more than Rs 8,300 crore and availed as well as passed on input tax credit of over Rs 1,500 crore. Action against the said network would be taken as per provisions of the GST law, the statement added.
The firms in the network were discharging an insignificant portion of their tax liability through payment of cash and were disclosing that most of the liability of tax has been discharged by them through an input tax credit. The ITC means that a manufacturer can deduct the tax paid on the purchase of inputs when he pays tax on the output.
The Economic Intelligence Unit (EIU) at the State Taxes and Excise headquarter did the data mining across various available data sources and arrived at the conclusion that a complex web of transactions among these 300 entities was created to pass on fake/ineligible input tax credit, officials said.
As a pattern, these newly registered entities were disclosing huge amounts of transactions in a very short span of time and getting them cancelled. The entities at the beginning of the supply chain have never made payment of the tax to the government.