Delhi Govt sends notice to 5,584 comaniesp under GSTR act 3A for not filing tax returns

New Delhi:Delhi government is working round the clock to increase the revenue which will help the government to perform various development works and also COVID works. In this regard, the Delhi government has reviewed tax collection of the last quarter. During the review process, it was found that 10800 companies registered under GST have either paid no tax or paid lesser tax to the Delhi government in the last quarter. The Delhi government has initiated action against these companies. The Delhi Government on Friday sent notices to 5,584 companies under GSTR act 3A for not filing tax returns and VAT notices to 36 companies for not filing tax returns.

Dy Chief Minister, Shri Manish Sisodia who also holds the portfolio of Delhi’s Finance Minister observed that nine sectors such as Automobile, Electronics, E-Commerce, Insurance, Financial Services, Consulting, Pharmaceuticals, Security and Healthcare sectors were not affected by the COVID-19 pandemic. Shri Sisodia wrote to the GST department that around 935 companies under these nine sectors have paid ZERO tax & 2017 companies have paid 50% tax. He also observed that the Delhi government will strictly scrutinise the reasons behind not filing tax returns by these companies from unaffected sectors.

Significantly, the government is also making a list of tax defaulters. Dy CM Shri Sisodia on Wednesday directed the Dialogue and Development Commission of Delhi (DDC) to prepare a detailed study to improve the revenue base in Delhi.\

After studying the tax return filings of around 15,000 companies the Delhi government on Friday sent notices under GSTR 3A to 5584 companies and VAT notices under u/s 59 (2) act to 36 companies. While studying the situation the Dy CM noted that there are nine sectors which were unaffected by the COVID-19 pandemic but there are various companies from these sectors who have paid ZERO tax or just 50% tax.

“In reference to the GST collection for FY 2020-21, I have analysed the data for the Quarter 1 collection. Cognizant that the COVID-19 pandemic has affected consumption, a deep dive analysis was conducted of those sectors whose consumption would likely be unaffected by the pandemic and the resultant lockdown. Some industries, like e-commerce, would have possibly grown in term of their sales. The sectors are: Automobile, Electronics, E-Commerce, Insurance, Financial Services, Consulting, Pharmaceuticals, Security and Healthcare,” noted the Deputy CM.

He further observed, “In view of this, enclosed is the list of 935 dealers who have paid 0 in Q1 2020-21 and 2017 dealers who have paid less than 50% of what they paid in the previous corresponding quarter (Q1 2019-20). Since the dealers’ sectors were probably unaffected, further scrutiny of their relatively piecemeal tax payment may be undertaken.”

In a bid to improve Delhi’s revenue deficit situation, the Trade & Taxes Department of Delhi government under the directions of Finance Minister & Deputy Chief Minister Shri Manish Sisodia has started analysing the return filing status of taxpayers registered under GST. This week, Shri Sisodia held a meeting with the officials of the department where it was presented that around 15000 taxpayers were analysed and nearly 970 taxpayers have not filed returns for 2020-21 from January to March. The Delhi government has also found that this year nearly 10800 companies paid lesser or zero tax from January to March. Taking cognizance of these findings the Delhi government has prepared a list of defaulters. Deputy CM Shri Sisodia has appealed all the companies to immediately deposit the taxes. He also said that the Delhi government will take stringent actions against the defaulters. The Delhi has till now evaluated 15,000 companies but in the future evaluation of 7 lakh companies registered under GST will be done. The Delhi government will take strict action against all the defaulters after the evaluation.

The analysis of the Delhi government has found that this year nearly 10800 companies paid lesser or zero tax from January to March and nearly 970 taxpayers belonging to both centre and state jurisdiction have not deposited any tax for the last two quarters. The Delhi government has received around Rs 2015 Crores lesser tax than that of the last year. In 2019 the Delhi government collected around Rs 5792 crores as tax returns but this year from January-March the tax collection has been only Rs 3777 crores.

The Delhi state Trade & Taxes Department has started analysing the return filing status of taxpayers registered in GST. Around 15000  taxpayers were analysed and it was seen that almost 970 taxpayers belonging to both Centre & State jurisdiction have not filed returns for Q4 2019-20 and Q1 2020-21. The extended time period granted for the filing of GST return for Q1 2020-21 got over in July 2020. The Delhi government is also identifying the taxpayers evading tax. The department has been able to recover Rs. 10 Crore from two such defaulting companies in the last one week. The department is also analysing the tax payment profile of such taxpayers along with their overall tax profile in the previous quarters.

Taking cognisance of the situation Shri Sisodia on Wednesday directed the Dialogue and Development Commission of Delhi (DDC) to prepare a detailed study to improve the revenue base in Delhi. Shri Sisodia said that DDC should suggest short & long-term measures to improve the revenue base of Delhi. He also directed that the DDC should consult with leading experts of the field and relevant organisations working in public finance to carry out the study.