What happens if a government department responds to a Right to Information (RTI) query and later discredits its own information (on social media) as incorrect or incomplete?
Well, the Goods and Services Tax Network (GSTN) has shot itself in the foot by going back on its RTI reply which stated that it has in its possession Input Tax Credit (ITC) of whopping Rs 6.14 lakh crore!
The applicant, Madhur Agarwal, a chartered accountant from Raipur, had sought information on Input Tax Credit in the country after he observed some sort of a pattern in non-payment of ITC over the last two years.
The GSTN gave a written response to Agarwal stating that it has blocked Rs 6.14 lakh crore of the taxpayers’ money. It said about Rs 2.96 lakh crore is pending for more than one year, which is against the rule. After the RTI response created flutter in the mainstream and social media, the GSTN put a tweet saying the “information being circulated on social media on the basis of an RTI reply is incorrect”. The GSTN further said in the tweet that its answer included “erroneous data entries made by the taxpayers.”
The Federal found out that there are no official document to substantiate explanation offered by the GSTN in the tweet.
In social media, a figure of Rs. 6.14 Lakh Crore of ITC blocked in GST is being circulated based on a RTI reply. The figure on verification has been found to be incorrect as it includes erroneous data entries made by the taxpayers. (1/2)
— GST Tech (@Infosys_GSTN) October 12, 2021
Agarwal told The Federal, “Some of my clients were facing issues with their Input Tax Credits of GST and their credits were not unblocked (paid to them) even after one year of the blocking. Later, when I spoke to some of my colleagues from other cities, I realized it is a much bigger issue than I thought. So I filed an RTI seeking information on the same.”
What is Input Tax Credit? How does it work?
Input Tax Credit is the amount of tax already paid to the government which can be availed of while filing one’s own GST returns. Agarwal explained this with the simplest possible example.
“Consider that a shopkeeper buys an item for Rs 118 (100 + 18 GST) and he sells it for Rs 236 (200 + 36 GST). He paid Rs 18 GST to the wholesaler while he earned GST of Rs 36 from a customer. In this case, while filing his GST returns he gets the credit of Rs 18 (which he had already paid while buying an item) and his effective GST becomes Rs 18 at the end of the day.” These credits help companies in several ways.
Agarwal said this is the way companies balance their GST returns so that they need not pay a large amount of cash. “Also, blocking of this credit results in double payment from the client to the government,” Agarwal added. The concerned department or an officer under GSTN has the power to block input tax credits of any taxpayer without prior intimation for one year ONLY.
What happens if incorrect information is given under RTI?
A person who gets wrong information under RTI can file a complaint with the RTI commissioner.
RTI activist Vijay Kumbhar said, “In this case, the information officer must have received the information from the concerned department and he forwarded it assuming it to be true. It would have been better had the department directly contacted and informed the applicant about the information.”
Kumbhar added that debunking information through informal ways like social media isn’t the right thing to do. “It also proves that the information given under RTI reply was incorrect,” he added.
The RTI activist suggested that the applicant may file an official complaint with the RTI commissioner under section 18 of RTI Act. “The official who gave wrong information will face legal action once the complaint is filed. The applicant will have to attach an official reply and photocopy of the social media post to the complaint. One can expect action within a month of filing the complaint,” Kumbhar said.