Friday, the Pune region of the Maharashtra GST department arrested UP businessman Sirajuddin Kamaluddin Chaudhary from Siddartha Nagar in Uttar Pradesh (UP) for fraudulently claiming Rs12.59 crores in input tax credit (ITC) against nearly Rs70.22 crores in fake goods’ purchased bills. On Sunday, the accused was brought to Pune on transit remand and remanded to two weeks of judicial custody by a magisterial court. According to the GST department, Chaudhary is the 68th GST evader to be apprehended in 2022-23. At GST Bhavan, the joint commissioner of state tax for Pune stated that it was an interstate operation involving officials from the GST department, Pune, and the UP police.

The department issued a press release stating, “During the investigation, it was determined that four major suppliers do not exist or are fake, as their GST registrations were obtained fraudulently using forged documents. Multiple investigations were conducted in the cases of these suppliers, and it was determined that Chaudhary unlawfully obtained ITC in the amount of Rs12.59 crores by using fake bills totaling Rs70.22 crores without the actual receipt of goods.

Chaudhary evaded capture and hid in a northern state. To apprehend the perpetrator, a special investigation team (SIT) was formed and dispatched to UP. On March 10, the team, with the assistance of the UP police, located and arrested the suspect. Subsequently, he was transferred to Pune on transit remand issued by the chief judicial magistrate of Siddhartha Nagar, Uttar Pradesh. “Upon appearance before the chief judicial magistrate of Pune, the defendant was remanded to 14 days of judicial custody,” stated the press release.

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Additional commissioner of state tax (Pune zone) Dhananjay Akhade, joint commissioner of state tax (Pune 2) Deepak Bhandare, and deputy commissioner of state tax Manisha Gopale-Bhoir oversaw the operation, which was led by assistant commissioners of state tax Sachin Sangle, Dattatraya Telang, Satish Lanke, and Satish Patil, along with state tax inspectors and other team members.

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Before the municipal elections in Uttar Pradesh (UP), the Goods and Services Tax (Goods and Services Tax) teams are raiding fiercely. Because of this, panic is being seen among the traders of the state. Traders have closed shops in many districts of the state. GST teams are going shop-by-shop to check the documents and take action if any discrepancy is found. Let us understand how much GST is applicable on the income of any businessman and who comes under its ambit.

GST was implemented by abolishing 17 taxes

GST was implemented on 1 July 2017. It removed many complexities of indirect tax, making it easier to do business. With this new system, 17 taxes like VAT, Excise Duty (on many things) and Service Tax were abolished. To promote small industries and businesses, the government had exempted businesses with an annual turnover of Rs 40 lakh from the purview of GST.

Apart from this, those businesses whose annual turnover was 1.5 crores were given exemption to deposit only 1% tax under the composition scheme. Service providers whose turnover was up to Rs 50 lakh were exempted from paying tax at the rate of only 6 per cent.

Traders allege

The shops which are not registered or fear of action are haunting them, they have closed their shops and are sitting at home. Traders say that shopkeepers who are not under the ambit of GST are also being harassed in the name of raids. It is alleged that some technical flaws are found in the investigation and then pressure is put for action. Establishments are threatened to be seized. Later penalty is deposited without tax assessment.

Who needs GST number?

When the turnover of a trader’s business exceeds Rs 40 lakh in a financial year, it becomes mandatory for him to get registered under GST. This limit has been kept at Rs 20 lakh for the service sector business. GST is applicable to all types of business.

At the same time, states like Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand, which have been placed in the special category, are required to obtain a GST number on their annual turnover of Rs 10 lakh. Small businesses, whose turnover is less than this. They are not required to register under GST. However, if they want, they can choose the option of registration.

GST slabs and rates

The GST Council sets the GST rate slabs. The GST Council reviews the slab rates for goods and services on a regular basis. GST rates for various goods and services in the country are divided into four slabs. 5% GST, 12% GST, 18% GST and 28% GST. Central GST (CGST), State GST (SGST) and Inter State GST (IGST) tax goods and services at different rates.

In the 47th meeting of the GST Council, all the products were included in the purview of GST. In this meeting, exemption from tax on some other products including pre-packaged, pre-labelled curd, lassi and butter milk was abolished.

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