Small Business

Small business struggles as CBIC sends notices, sits on Rs 40,000 crore input credit- The New Indian Express

Express News Service

NEW DELHI:  Small businesses have been saddled with a spate of notices asking for income tax returns of the last three years, as they struggle for working capital in the face of the delayed GST input tax credit amounting to nearly Rs 40,000 crore.

Small traders, exporters and custom manufacturers who were expecting to get the benefit of GST input credit, have been put through what the revenue department calls 360-degree scrutiny, by linking their income tax returns with their indirect tax returns, hence the tax notices. 

Sahil Shah, a small businessman tweeted: “Service tax department sent me notice for non-registration, non-filing of taxes among 17 charges. If they had spent time checking for my Service Tax registration number and returns… Officer simply shot off notices because (he has) no time to check.”

Small manufacturers say though they may have a large turnover on which GST is computed, since most of them are simply adding value for a larger factory by doing a contract job, their profit percentage on which income tax is calculated is very low. 

The Central Board of Indirect Taxes and Customs (CBIC) has frozen tax credits of around Rs 40,000 crore as returns filed by close to 2,000 entities did not match their GST filings. There are also cases where returns were not filed. 

“Yes, notices have been served to those with discrepancies in tax returns. They have been given time to respond. In the last few months we have detected many instances where exporters, jewellers and small businesses had been evading tax using fake invoices,” a senior CBIC official said.

Around 5K firms under the tax lens

According to sources, around 5,000 companies have come under the scanner of tax authorities due to alleged discrepancies between their GST filings and income tax returns.

Source

neallesh@yahoo.co.uk

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