A government report revealed that fake companies floated with fake addresses, issued fake GST invoices and generated fake e-way bills, with fake vehicle registration details without supplying any goods causing huge loss to the exchequer.
The government is looking to plug loopholes in the Indian customs law provision that allows tax exemptions for gifts up to Rs 5,000 and trade samples up to Rs 10,000 sent to India from abroad.
Particularly hit has been the apparel sector, where the time taken by the industry to adjust to the Goods and Services Tax regime, downward revision of export incentives, and a credit squeeze faced by small and medium scale enterprises, has pushed production downwards.
The CBEC will itself be rechristened as the Central Board of Indirect Taxes and Customs and will supervise GST and Customs activities and provide the government policy inputs.
The focus will be on tackling the unfinished agenda requiring immediate attention like tax structure for solar projects, uniform tax rate on state-organised and state-authorised lotteries, taxing non-potable alcohol besides certain changes in the law, extension for NAA and rate rationalisation.
Experts point out that National Anti-profiteering Authority does not have the power to advise companies on depositing amounts voluntarily.
Assembly elections coming up in November and December could offer a window of opportunity to the government to make GST attractive through rate cuts.
'So far, the government has sanctioned more than Rs 300 billion as GST refunds,' Ansh Bhargava and Aditya Singhania point out.
