NAGPUR: Four companies from the city have been pulled up by the directorate general of GST intelligence (DGGSTI) for not having passed on the tax component charged from their buyers to government.
In an indirect tax system, the liability can be passed on to recipient of goods or services by the seller, but it has to be later remitted to government within the due date.
Two of the four companies are major names like NSSL Ltd which comes under the NECO Group and Topworth Urja and Metals Ltd. CBI had registered its 19th FIR in the coalgate case against Topworth’s directors in 2014. Even NECO group has been under CBI scanner in the coal scam case.
Sources said the DGGSTI action led to recovery of around Rs24 crore from the four defaulters. Topworth’s dues came to around Rs13 crore and that of NSSL Ltd Rs9 crore. NSSL Ltd has a unit at Hingna. The other two companies are M/s Ikon Remedies and M/s Kukreja Brothers having a liability of Rs2.1 crore and Rs1.42 crore each. The two companies are into pharmacy business.
The entire amount has been recovered from the four assesses but interest component remains.
Not passing on the tax to government despite recovering it from a buyer is taken as a serious default under the GST regime. The provisions also call for arrest in such cases. Arrest can be prevented if the entire liability is paid up. The companies’ directors here have been saved from arrest as they have cleared the dues, said sources. The interest can be paid later on.
It was found that the companies had not paid the tax for as much as a year. The investigation was conducted on the basis of intelligence inputs received by the department.
The tax due from NSSL and Topworth was out of business to business transactions. As the chain of trade goes further in such deals, clients of these firms have also availed input tax credit on purchases from companies. This has led to a double loss to the government. Credit is proportionate reduction from tax liability on the basis of GST paid on purchase of inputs.
The companies’ buyers availed a credit but the tax charged was not deposited with the exchequer at all. The pharma companies directly dealt with end-consumers who do not get the credit. DGGSTI has made around five arrests in evasion cases so far.
Source- Times of India.