Amit Mitra, West Bengal’s former finance minister and principal chief advisor to Chief Minister Mamata Banerjee, has urged Union Finance Minister Nirmala Sitharaman to convene a Goods and Services Tax (GST) Council meeting to look exclusively into numerous regulations and tax frauds.
Mitra, in a letter written to the Union minister, has stated that with the two major concerns that require attention, “a total rethink” by the Centre and the GST Council on the structure and function of the indirect tax is needed.
Referring to two Lok Sabha questions (unstarred questions – 680, 686 – dated, July 24), Mitra said the Centre’s figures show that fraud worth Rs 1.15 lakh crore has been detected from GST invoices, for 2018-19 to 2022-23.
“It is also shocking that out of 69,426 GST identification numbers verified during the last two months, 20,893 were found to be simply non-existent – fraudulent. Amount of GST evasion detected during the last two months came to the tune of Rs 19,638 crores,” he pointed out, adding that of the 1.4 crore GST-registered businesses, only 0.42 per cent registered taxpayers were verified, and this brought to light 30 per cent non-existent and fraudulent registrations.
The system appears complex for micro, small and medium enterprises (MSMEs) with 770 notifications issued, so far. There are 178 prescribed forms in the tax system, 191 circulars, 75 section amendments under CGST Act, 129 amended rules under CGST, and the change in rates for over 400 goods, and 100 service categories, Mitra pointed out. He asked how an MSME-category firm would cope with such a regulatory structure.
Mitra cautioned that given the situation, firms in the MSME sector are de-registering, or considering to de-register, finding it difficult to comply with such a complex regulatory structure. “I, therefore, humbly urge you to convene a GST Council meeting which exclusively focuses on these two big issues…,” he added.
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