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level is one reason for lower-than-expected GST revenues - the correction of in-
verted duties at the current juncture is apparently being supported by a number
of States.
The Centre recently said it will use about ` 28,000 crore of ` 47,271 crore
absorbed by the Consolidated Fund of India in FY18-FY19 as ‘surplus’ revenue
from the GST Compensation Cess to reduce the State Governments’ GST revenue
shortfall in FY20. Even after this, the States’ GST revenue (SGST) in FY20 will be
some ` 28,000 crore short of the level they would have achieved under the 14%
guaranteed annual growth formula.
In her latest Budget speech, Sitharaman said : “It is decided to transfer to
the GST compensation fund balances due out of collection of the years (2017-18
and 2018-19), in two instalments. Hereinafter, transfers to the fund would be lim-
ited only to collection by way of GST Compensation Cess.”
Some States are threatening to move the Supreme Court against the Cen-
tre’s decision. Kerala Finance Minister Thomas Isaac said the State Government
would approach the Apex Court under Article 131 to secure the pending GST
compensation from the Centre. Even Mitra had said it was for the Centre to de-
vise a mechanism for payment of compensation to States under GST, if the fund
set up for the purpose ran dry, given the silence of the relevant law on an alter-
native mechanism.
[Source : Financial Express, New Delhi, dated 14-3-2020]

GST : Input Tax Credit frauds rise 170% in just nine
months of FY20

The number of Input Tax Credit (ITC) fraud cases under Goods & Ser-
vices Tax (GST) in the first nine months of this financial year has risen 170 per
cent. more than that reported in the whole of last fiscal. During the same period,
the amount involved is nearly 80 per cent. of full FY19.
According to a Parliamentary Committee report, tabled on 12-3-2020, the
number of ITC fraud cases, based on fake invoices during April-December of this
fiscal, surged to 5,986. This number was 2,211 in the 12 months of 2018-19.
In terms of amount involved, the first nine months of this fiscal recorded
over ` 13,000 crore while recovery was nearly ` 550 crore.
During 2018-19, the total quantum was nearly ` 10,400 crore, while re-
covery was a little over ` 800 crore.
Cases booked
During the first 10 months (April-January) of the current fiscal, the num-
ber of cases was 8,335 with nearly ` 30,000 crore involved and the total recovery
was nearly ` 15,000 crore.
During fiscal 2018-19, the number of cases booked was over 7,300,
amount involved about ` 38,000 crore and recovery nearly ` 19,000 crore.
The Committee noted that system-based analytical tools and intelligence
of the Directorate General of Analytics and Risk Management are being used to
curb evasion in GST.
It is to be noted that intensive anti-evasion efforts are being taken, par-
ticularly with respect to ITC frauds based on fake invoices.
GST LAW TIMES  26th March 2020  149