Indore: CGST dept detects Rs 4.6 cr of ineligible ITC in two cases, 3.5 recovered

The case was booked by the officers of the Bhopal zone, after the CGST officers and Central Excise Commissionerate detected some ineligible Input Tax Credit (ITC) of GST, through data analytics.

However, the official statement stated that the concerned taxpayers immediately paid the money back to the government, after they were confronted with facts, by the officers.

Initially, around 4.6 crores had been detected, out of which, more than 3.5 crores from taxpayers were made to recover from taxpayers in the first week of September, 2022.

The recoveries were made under non-reversal of ITC attributable to exempt supply under section 17 (2) of the CGST Act, 2017 and availing of ineligible ITC under section 17 (5) of the CGST Act, 2017.

As per the provisions of CGST, if any taxpayer supplies both taxable as well as exempted goods and services, he is required to reverse the ITC of common inputs or input services as per the formula given in CGST rules. Also, section 17 (5) of the CGST Act bars certain types of inputs, input services and capital goods from availing.

The release further said that one of the taxpayers failed to reverse the proportion of input tax credit taken on the input services, that were used in the supply of both taxable and exempt goods, which was in violation of Rule 42 of the GST Act 2017.

Also, he had utilized the ineligible portion of ITC in making payment of GST on taxable supplies, the release said. After the officers of Indore Commissionerate explained the facts and provisions to him, he reversed 2.12 crores out of the 3.1 crores initially detected from him.

While, the other taxpayer had availed ineligible ITC of insurance services taken for employee insurance, which is barred under section 17 (5) of the CGST Act, 2017. After the officers explained the facts and provisions, he too reversed 1.43 crores, the amount that was initially detected from him.

The release also stated that extensive data-analytics tools are now being used to detect tax evasions.

"The Bhopal zone of CGST covers the jurisdiction of two states namely Madhya Pradesh and Chhattisgarh and comes under the Central Board of Indirect Taxes and Customs (CBIC). Detection of the wrong availing in this case of the wrong availing of ITC came through the data-analytics driven approach of CBIC field formations."

"Under the guidance of Chief Commissioner of Bhopal zone, Shri Navneet Goel, officers of Indore CGST Commissionerate and other Commissionerates of Bhopal zone are extensively using different data-analytics tools to detect possible tax evasion and keeping a watch on suspected taxpayers." (ANI)