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Government of Karnataka
(Department of Commercial Taxes)
Deputy Commissioner of Commercial Taxes (audit)-5.2, DGSTO-5, Vanijya Therige Karyalaya-2,
Near National Games Village, Rajendra Nagar, Koramangala, Bangalore-560 047

e-mail id:dcctaudit5.2@gmail.com/
dccta-52@ctd.ka.gov.in

Form GST ADT – 02

[See rule 101(5)]

Reference No. AD2910230297139/2024-25

To,
Name M/s. Vinfra Buildcon
No.36, Mestrappa Building, 80 Feet
Hennur Main Road, Bangalore – 560 084
GSTIN 29ABGPV7197L1ZJ / LVO-057
Status Proprietorship
Style of business Works Contract -Electrical Machinery
and Equipment and Parts
Tax periods April-2020 to March-2021

Audit Report No.: ____/2024-25 dated:25.11.2024

Audit Report under section 65(6) of The Karnataka Goods and Services
Tax Act, 2017 / The Central Goods and Services Tax Act, 2017

Your books of account and records for the F.Y.2020-21 has been examined
and this Audit Report is prepared on the basis of information available / documents
furnished by you and the findings are as under, which was intimated to you in the
observation findings issued from this office dated:29.10.2024 as under;

Para No. 1: Non-reversal of ITC in respect of non-payment to inward supplies

within 180 days: -

Non-reversal of ITC in respect of non-payment to inward supplies within 180

days, as per section 16(2) of KGST/CGST Act-2017 read with Section 20 of IGST Act-
2017 the recipient of goods or services is required to make payment to supplier
within 180 days from the date of issue of invoice.

As per the copy of Balance Sheet furnished it is observed that you have
outstanding ‘Trade Payables’ to a tune of Rs.3,09,51,705/-

Therefore you are herewith called up on to furnish the payments particulars

made towards sundry creditors on supplies received involving the ITC claim to the
tune of Rs.7,01,980/- (IGST), Rs.77,64,750/- (CGST) and Rs.77,64,750/- (KGST)
through monthly returns filed in form GSTR-3B. Failing which the claim of ITC made
shall be treated as ITC claimed in defiance of proviso under Section 16(2) of the
KGST/CGST Act, 2017 read with Section 20 of the IGST Act, 2017, and shall be
disallowed. Please note.

M/s. Vinfra Buildcon Audit U/s 65 for the year 2020-21

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Para No.2: Classification of GST paid on Outward supplies in the financial year-
2020-21.

Further on examining the relevant records and information furnished to the

audit it is observed that you have effected outward supplies at difference GST rates
namely 5%, 12%, and at 18%, therefore you are hereby called upon to furnish the
classification of outward supplies effected for verification along with copies of
invoices, failing which the rate of GST charged at 5% and 12% shall be disallowed,
and the outward supplies admitted shall be subjected to 18%.

And in the event of short declaration/short payment of tax you are also
required to pay an interest in terms of sub-section (1) of Section 50 of the Central
Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017,
read with Section 20 of the Integrated Goods and Services Tax Act, 2017.

Para No. 3: Excess Input Tax credit claimed in GSTR-3B Returns in respect of
invoices not figuring in relevant GSTR-2A.

During the course of verification of ITC availed in GSTR-3B returns vis-a-vis

invoice details available in GSTR-2A for the period 2020-21 it is noticed that you
have availed ITC in GSTR3B returns in respect of few invoices which are not figuring
in the relevant GSTR-2A.

As per section 16(2) (C) OF KGST/CGST Act-2017 read with rule 36 of

KGST/CGST rules-2017, one of the conditions to avail the Input tax credit is the tax
charged in respect of such supply has been actually paid to the government, either in
cash or through utilization of ITC credit admissible in respect of the said supply.
Therefore, as per the said provision, it appears that the payment of tax by the
supplier is a mandatory requirement before availing ITC by the tax payers. The
details of inward supplies received from the respective suppliers for a particular
month are reflected in GSTR-2A of a tax payer, only when the registered supplier files
GSTR-1 for the month after discharging his liability in GSTR-3B.

For the inward supplies on which ITC availed by you and which are not
reflecting in your GSTR-2A, it may be construed that the registered supplier has not
filed GSTR-1 and has not discharged GST on such supplies. This leads to conclusion
that the GST in respect of such supplies has not been paid to the government and
accordingly, ITC availed by you in respect of those suppliers becomes
ineligible/irregular.

In view of the above, the ITC claimed in GSTR-3B returns in respect of the
invoices not figuring in the relevant GSTR-2A appears to be irregular. The total
irregular ITC availed in GSTR-3B returns in respect of invoices not figuring in
relevant GSTR-2A has been worked out as the below table.

ITC claimed as per 3B ITC Available in 2A Excess claimed

Month
IGST CGST KGST IGST CGST KGST IGST CGST KGST
Apr-20 0 0 0 45 0 0 -45 0 0
May-20 1,06,272 4,47,085 4,47,085 106272 370478 370478 0 76,607 76,607
Jun-20 1,20,314 8,91,480 8,91,480 120314 862782 862782 0 28,698 28,698
Jul-20 98,427 18,10,580 18,10,580 98145 1686236 1686236 282 1,24,344 1,24,344
Aug-20 50,905 10,33,497 10,33,497 50905 826030 826030 0 2,07,467 2,07,467
Sep-20 0 3,11,872 3,11,872 111568 509540 509540 -1,11,568 -1,97,668 -1,97,668
Oct-20 30,970 5,14,429 5,14,429 30951 514192 514192 19 237 237
Nov-20 0 6,31,817 6,31,817 629 628755 628755 -629 3,062 3,062
Dec-20 1,69,679 2,26,290 2,26,290 169741 259304 259304 -62 -33,014 -33,014
Jan-21 3,204 1,50,676 1,50,676 3204 166780 166780 0 -16,105 -16,105
Feb-21 0 6,41,464 6,41,464 0 336951 336951 0 3,04,513 3,04,513
Mar-21 1,22,209 11,05,561 11,05,561 122209 1049620 1049620 0 55,941 55,941
Total 7,01,980 77,64,750 77,64,750 8,13,983 72,10,668 72,10,668 -1,12,003 5,54,082 5,54,082

M/s. Vinfra Buildcon Audit U/s 65 for the year 2020-21

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Tax payer is required to calculate and reverse/pay the CGST/KGST/IGST
input credit availed on those invoices which are not figuring in relevant GSTR-2A,
failing which the same shall be reversed as per the above table, and further which
attracts interest liability in terms of Section 50(3) of the CGST/KGST Act, 2017, r/w
Section 20 of the IGST Act, 2017.

Para No.4: Ineligible ITC and Blocked credit

On verification of the available documentary evidences namely entries in

GSTR-2A you have availed ITC on the following inward supplies; which the details
are reproduced as below;

Sl. No. Supplier's GSTIN Name of Supplier CGST KGST IGST

1 29AEGPL1702E1ZV 6TH GEAR 7,872 7,872 -
2 29AACFB9022D1ZR BANGALORE TIMBER CORPORATION. 17,161 17,161 -
3 29AJGPJ4373C1Z9 BASAVESHWARA TYRES 1,225 1,225 -
4 29AQOPP4481C1ZG COMMERCIAL AUTOMOBILES 167 167 -
5 29ABPPL5230R1ZU CONCORDE ENGINEERS 1,181 1,181 -
6 29AAIPF9501B1Z0 EXCEL GENUINE AUTO SPARES 741 741 -
7 29AAACF2404N1ZM FEDERATION OF KARNATAKA CHAMB… 540 540 -
8 29AAAFK6627K1Z0 KHIVRAJ MOTORS 16,895 16,895 -
9 29AASPK1265B1ZO LEYLAND MOTORS 976 976 -
10 29AACFP1812H1ZF PRESTIGE AUTOMOBILES 1,364 1,364 -
11 29AIHPH5712M1ZY ROYAL AUTOMOBILE 312 312 -
12 29ANEPB7973L1ZG SHEETAL BATTERY CORPORATION 7,598 7,598 -
13 29AVIPS5035Q1ZO SHESHADRI TYRES AND SERVICE 275 275 -
14 29ADHPC2391N1Z7 SLNP PITSTOP 1,345 1,345 -
15 29ACJPV1591Q1ZI SPARES & GENERAL AGENCIES 1,388 1,388 -
16 29AIWPR3514Q1Z5 SRI MANJUNATHA TYRES 71,914 71,914 -
17 29AABFR3935Q1ZJ SRI RAGHAVENDRA AUTO TRADERS 422 422 -
18 29AAQPK6972K1ZR SRI VENKATESHWARA AUTOMOBILES 7,157 7,157 -
19 29AATFS9639Q1ZN SRI VENKATESHWARA TYRES COMPA… 1,356 1,356 -
20 29AAKFS9263R2ZX SRINIVASA AUTOMOBILES 3,943 3,943 -
21 29AABFU8726A1Z6 SURANI TIMBER AND PLYWOODS 1,045 1,045 -
22 29AAACT1821B1ZU TAFE ACESS LIMITED 10,026 10,026 -
23 29AAAAT4493P1ZN THE BANGALORE MOTOR OWNERS CO… 17,979 17,979 -
24 29AAACU0564G2ZC UNION BANK OF INDIA 2,41,691 2,41,691 -
25 29AAACU0564G6Z8 UNION BANK OF INDIA_AB 64 64 -
26 36AAACU0564G3ZG UNION BANK OF INDIA_AB CCD - - 468
27 29AAACU5552C1ZF UNITED INDIA INSURANCE COMPAN… 4,281 4,281 -
28 29EAVPS6332G1ZX V M S TYRES 175 175 -
Total 4,19,092 4,19,092 468

Therefore, you are hereby asked to establish the nexus between the inward
supplies and the details of inward supplies used in the course of or in furtherance of
your business in terms of provisions of the Section 16(1) of the CGST/KGST Act,
2017, failing which the above claim of ITC shall be subjected to reversal as not used
in the course of business.

And in the event of excess / wrong claim of ITC you are required to pay an
interest in terms of sub-section (3) of Section 50 of the Central Goods and Services
Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017, read with Section 20 of
the Integrated Goods and Services Tax Act, 2017.

Para No.5: Non-payment of GST under reverse charge (RCM) on inward supplies
in the financial year-2020-21.

Further on examining the relevant records and information furnished to the

audit it is observed that you have effected inward supplies liable to reverse charge as
below;

a) Sub-Contract Charges Rs.6,14,42,507/-

b) Labour Charges Rs. 3,750/-
c) Royalty on Contract receipts Rs. 3,70,500/-
d) Royalty on Crusher Rs. 42,00,000/-
e) Transpiration Charges Rs. 34,70,656/-

M/s. Vinfra Buildcon Audit U/s 65 for the year 2020-21

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Whereas as per monthly return filed in form GSTR-3B ‘Inward Supplies

(Reverse Charge)’ was admitted to a tune of Rs.69,351/- (admitted at 18%), resulting
in short declaration of taxable supplies to a tune of Rs.6,94,18,062/-, and resulting
in short payment of GST under RCM to a tune of Rs.60,26,541/- (CGST-9%), and
Rs.60,26,541/- (KGST-9%).

And in the event of short declaration/short payment of tax you are also
required to pay an interest in terms of sub-section (1) of Section 50 of the Central
Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017,
read with Section 20 of the Integrated Goods and Services Tax Act, 2017

Para No. 6: Non-payment of interest on delayed return.

On verification of monthly returns filed for the tax periods in the year
2020-21, it is noticed that you have delayed filing monthly return and payment of tax
for tax periods of April’2020 to March’2021. This is in contravention of section 39(1)
of CGST/KGST Act-2017. Accordingly, you are required to pay an interest in terms of
section 50 of CGST/ KGST Act-2017 against delayed of return and payment of tax in
respect of aforesaid tax periods, as detailed in table below:

Return Date of Delay Rate of Tax/Cess paid in Cash Interest payable

Period Filing Due Date filing Interest IGST CGST KGST IGST CGST KGST
Apr-20 08-08-2020 20-05-2020 80 18 - 19,552 19,552 - 771 771
May-20 08-08-2020 20-06-2020 49 18 - - - - - -
Jun-20 19-10-2020 20-07-2020 91 18 - 6,54,072 8,41,554 - 29,353 37,766
Jul-20 22-10-2020 20-08-2020 63 18 - - - - - -
Aug-20 09-11-2020 20-09-2020 50 18 - - - - - -
Sep-20 10-11-2020 20-10-2020 21 18 - - 1,06,799 - - 1,106
Oct-20 22-12-2020 20-11-2020 32 18 - - - - - -
Nov-20 19-01-2021 20-12-2020 30 18 - - - - - -
Dec-20 29-01-2021 20-01-2021 9 18 - - - - - -
Jan-21 23-03-2021 20-02-2021 31 18 - 2,34,143 4,80,529 - 3,580 7,346
Feb-21 09-06-2021 20-03-2021 81 18 - 3,48,817 3,48,817 - 13,934 13,934
Mar-21 15-07-2021 20-04-2021 86 18 - 41,31,941 42,54,150 - 1,75,240 1,80,423
Total - 53,88,525 60,51,401 - 2,22,877 2,41,346

Non-payment of Interest on delayed filing of monthly returns, as verified from

the details of GSTR-3B furnished, it is noticed that for the return period of April’2020
to March’2021 you have filed return beyond the due date, therefore you are liable to
pay interest under section 50 (1) on delay payment of tax under GST @ 18% p.a on
the net tax liability paid using cash balance available in Electronic cash Ledger.

In view of the above findings and observations, the short payment of tax is
worked out and recorded as under;

Para Tax involved Interest levied @ 18%

Particulars
No IGST CGST SGST Total IGST CGST SGST Total
Non-reversal of ITC in respect of non-
1 payment to inward supplies within 180
days 701980 7764750 7764750 16231480 457306 5058362 5058362 10574031
Classification of GST paid on Outward
2
supplies in the financial year-2020-21 0 9173594 9173594 18347188 0 5976157 5976157 11952313
Excess Input Tax credit claimed in
3 GSTR-3B Returns in respect of invoices
not figuring in relevant GSTR-2A 0 554082 554082 1108164 0 360958 360958 721916
4 Ineligible ITC and Blocked credit 468 419092 419092 838652 305 273018 273018 546342
Non-payment of GST under reverse charge
5 (RCM) on inward supplies in the financial
year-2020-21 0 6026541 6026541 12053082 0 3926003 3926003 7852005
Non-payment of interest on delayed
6
return. 0 0 0 0 0 222877 241346 464223
Total tax payable 702448 23938059 23938059 48578566 457611 15817375 15835844 32110830

M/s. Vinfra Buildcon Audit U/s 65 for the year 2020-21

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You are directed to discharge your statutory liabilities in this regard as per the
provisions of the Act and the rules made thereunder, failing which proceedings as
deemed fit may be initiated against you under the provisions of the Act.
Digitally signed by

SUMANA SUMANA
Date: 2024.11.25
23:54:56 +05'30'
(Sumana)
Deputy Commissioner of Commercial
Taxes (Audit)-5.2, DGSTO-5,
Koramangala, Bengaluru

M/s. Vinfra Buildcon Audit U/s 65 for the year 2020-21