GST’s next phase: Anti-tax evasion

New Delhi: After rationalization of rates in the first phase, the new phase of goods and services tax (GST) is focussing on anti-tax evasion.

From taxmen cracking down on tax evaders last week to rolling out the e-way bill from 1 April, the government has signalled that it will no longer go easy on evaders after nine months of introduction of this tax. It has also sought to hasten the process of engaging fraud analytics providers to crunch GST data to look for known and unknown patterns of tax evasion.

This comes at a time the government suspects massive tax evasion under this new indirect tax regime that was rolled out on 1 July.

It has through analyzing returns data available with the GST Network detected instances of understating value of transactions through collusion of buyers and sellers, use of the same email ID to obtain multiple registrations across states to evade tax and instances where taxes are collected from consumers but not paid to the tax authorities.

In a press conference on Monday, finance secretary Hasmukh Adhia also acknowledged the government’s focus on increasing compliance now that taxpayers have settled into the new tax regime. He said taxmen will crack down on tax evaders and also start conducting checks soon on trucks to see if e-way bill documents are in order.

E-way bill is an electronic documentation of movement of goods to ensure that there is no under-reporting of transactions.

The government hopes that these steps will help in improving buoyancy of GST revenues that have stabilized in the range of Rs85,000-90,000 crore monthly.

Some of the other anti-evasion measures that are in the pipeline include matching of invoices of buyers and sellers and a reverse charge mechanism wherein a large registered buyer has to pay tax on behalf of the small unregistered seller.