Tax notices, summons served to pre-GST, dispute decision circumstances

With the present monetary yr drawing to a detailed, a collection of tax notices and summons have been despatched out to taxpayers from the oblique tax authorities in Mumbai and another tax zones throughout the nation. The queries via letters and summons relate to circumstances predating June 2017 rollout of Goods and Services Tax (GST) and in addition contains circumstances the place taxpayers had opted for decision underneath the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS), 2019 — a dispute decision scheme for pending service tax and excise circumstances that was introduced within the Budget for FY20.
Citing “an inquiry in connection with SVLDRS filed under voluntary disclosure under the Central Goods and Services Tax Act, 2017”, the summons despatched to a number of taxpayers in Mumbai zone, have requested for service tax returns, steadiness sheets, revenue and loss accounts, cenvat credit score for monetary years 2015-16, 2016-17 and 2017-18 (until June 2017).
The summons have been despatched underneath Section 70 of CGST Act, which supplies powers to tax officers to summon individuals to offer proof and produce paperwork.
Separately, in another circumstances, queries have been despatched with a 7-day response deadline for circumstances referring to service tax funds earlier than GST rollout, trade sources mentioned.

ExplainedAmid projections of decrease income stream this yr

Queries despatched to the Central Board of Indirect Taxes and Customs by The Indian Express went unanswered.
An trade skilled, who didn’t want to be quoted, mentioned the flurry of notices may very well be reflective of decrease income stream within the aftermath of the Covid-19 pandemic, including that tax authorities can provoke inquiry for a interval backdating 5 years if there’s a case of mala fide intent. “Even though the SVLDRS scheme ended long ago, and applications were accepted then, tax authorities can ask for information within five years if there’s a mala fide intent,” the skilled mentioned.
The queries despatched by tax authorities come even because the CBIC has individually directed its area places of work to train utmost prudence and most warning in attachment of property of a taxpayer in circumstances involving GST evasion, stating that such a treatment will be thought-about solely in circumstances involving evasion, faux invoicing and delay of greater than three months in depositing tax collected and that the worth of the property hooked up provisionally will not be extreme.
The authorities has revised down its estimated revenues from direct and oblique taxes for 2020-21 monetary yr. GST mop-up is estimated to be decrease by Rs 1.49 lakh crore and customs obligation collections estimated to be decrease by Rs 26,000 crore in comparison with the price range estimates for this fiscal.
The legacy dispute decision scheme, SVLDRS, was introduced by Finance Minister Nirmala Sitharaman within the Budget for FY20 to “allow quick closure” of the litigations pertaining to the pre-GST regime. Under this scheme, reduction was to the tune of 70 per cent of the obligation concerned if it was Rs 50 lakh or much less and that of fifty per cent if it was greater than Rs 50 lakh. This was for circumstances pending in adjudication or enchantment or in investigation and audit. In circumstances of excellent arrears of income, the reduction was 60 per cent of the obligation quantity if it was Rs 50 lakh or much less and 40 per cent, if it was greater than Rs 50 lakh.