HP: Two plastic bag manufacturing companies slapped with Rs 3.17 crores fine for GST fraud

he accused companies were allegedly paying only 5 percent GST, thereby violating the notification issued by CBIC and GST Council through the official gazette under which 18 percent GST was fixed for companies making non-woven carry bags.

Nahan(Himachal Pradesh):The South Enforcement Zone team of the State Tax and Excise Department on Sunday imposed a fine of Rs.3 crore 17 lakh 77 on two non-woven carry bag manufacturing companies in Sirmaur and Solan for violation of the GST Act. The accused companies were allegedly paying only 5 percent GST, thereby violating the notification issued by CBIC and GST Council through the official gazette under which 18 percent GST was fixed for companies making non-woven carry bags.

As informed by South Enforcement Zone team official GD Thakur, a senior official from the state department had issued orders to collect 5 percent GST on carry bags under the advance ruling. Thus, because of the different guidelines from the Central and State Government officials, the traders manufacturing non-woven carry bags had paid only 5 percent GST, thereby creating discrepancies.

These traders also allegedly took a refund from the government by using the GST input tax credit. Around seven such companies from Solan and Sirmaur took a total of Rs 7 crore 27 lakh 1397 from the central and state government. Possible refunds taken from other such companies are also being assessed. According to t, only 18 percent GST is payable on all items in the non-woven products category.

The state government faced a huge loss of revenue tax. The officials have taken the remaining five out of seven companies under scrutiny ans will also initiate action against the administrative officer who gave the faulty instructions.