10% & 20% GOVERNMENTS

10% & 20% GOVERNMENTS

I agree democratically elected Central and State Governments have to fulfill aspirations of the Mass. To fulfill the aspirations of the mass they need money, money, more of money.

The only source for Governments is Income Tax and GST. All other sources are immaterial and insufficient. They have limits for borrowings, even if they borrow it has to be repaid out of Income tax & GST.

The duty of collecting taxes is given to the Income Tax and GST officials. There are given in the form of annual targets. I was told by a Senior Revenue Official that targets are increased by 20% every year notwithstanding the fact that GDP growth is around 6 to 7% only.

Nobody is independent (financially) including the middle aged and senior Indian Revenue Service Officers. They cannot think much independently. When the business growth is only 6-7%, but the growth in tax collection targets increase by 20% they are unable to raise their voice against the unachievable targets. During FY 23-24 they resorted to unsustainable, illogical, sometime illegal methods of demanding and collecting taxes.

The some of those methods adopted by Income Tax Department for collecting more taxes are

(1) Passing orders of demand and adjust refunds. These orders are mostly not seen by the Assessee as they are sent only to the e mails and posted in the portal. Emails are that of consultant and passwords are with Tax Practitioner. As only refunds are reduced nobody comes to know about it.

(2) Issuing 148A, 148A(d) notices or orders in short time gaps of 3 days to 7 days, followed by 148 notices, then transferring cases to Faceless Assessment. All notices including the first notice under section 144B till the Assessment Order and demand notice are served as per section 282 only by mail and uploading in the portal.

As the notices were not responded, all the

1. Bank deposits, including sales collections

2. All Borrowings deposited into bank accounts

3. Cruelly in some cases both deposits and withdrawals

are treated as unexplained income/ expenses/from undisclosed sources under section 68, 69, 69A, 69C etc and tax is demanded under section 115BBE at 60% + surcharge.

Now you cannot file revised returns after December following and Anything filed after that is treated as updated return, all the claims for deduction are disallowed even if they were earlier allowed when original return was filed.

Thus huge uncollectible demands have been raised, now it is passed on to the JAO for collection. The JAO under the control of the Jurisdictional PCIT start attaching bank accounts without guilt/ any mercy and feels that he is not responsible and he cannot do anything to stop the recovery as the order was passed by Faceless Assessment Authority.

Now the assessee runs pillar to post and begs before the Jurisdictional PCIT by paying 20% of the unsustainable demand, and gets maximum 6 monthly installments to pay this 20%.

Thus, the coffers fill fast. The total such demands is Rs. 20,00,000/- crores and before 31^st March 2025 the deposits made for getting stay will be Rs.4,00,000/- crores.

Thus the Central Government can be called 20% Government

Now comes its sibling the State GST Department. Their modes operating is also same.

They will issue notices under section 73, 74 sometimes covering both the sections for

(1) GSTR 2A- 3B differences,

(2) Difference between TDS deducted and GSTR 1 Turnover (always TDS is lower)

(3) Difference between GSTR 3B and GSTR 1

(4) Non issue of e way bills (without knowing individual invoice values)

(5) Demand reversal of all ITC taken as creditors (Loan creditors, VAT period creditors all are included)

Issuing DRC 01 followed by 3 remainders and finally a DRC 07. They do not worry about any of the timelines for issuing notices/orders by section 73/74.

There was no response to all the notices or the explanation given are no sufficiently supported by Documents.

They confirm the show cause notice & demand tax ,equal penalty and interest for many years.

Now they also have power to attach bank accounts. They freeze / remove money from the bank after 90 days of passing orders. But Tamilnadu State Officers are little different, they start following up pre- deposit for appeal immediately after passing the orders. On 91^st day they attach your bank account for sure, if you have not made 10% pre deposit and filed an appeal before that.

Thus the State Governments can be nick named as 10% Governments.

We have to live with 10% and 20% Governments.