New Delhi: The indirect tax administration has detected under-reporting of online sales by several companies when their reported online sales were matched with tax collected at source (TCS) on these transactions furnished by e-commerce platforms like Amazon and Flipkart, the Financial Express reported on Tuesday.

The finding implies that the actual under-reporting of sales and the GST (goods and services tax) liability of many companies selling their wares through e-commerce portals may actually be higher considering these players also have off-line sales. An email sent by Mint to the Central Board of Indirect Taxes and Customs (CBIC), the central government’s indirect tax administration, remained unanswered at the time of publishing.

Experts said one needs to analyse the results thrown up by data analysis done by tax officials. “The mismatches shown by data analytics need to be further analysed to see if these are issues related to reconciliation or are instances of sellers actually not reporting it and if so, what are the reasons for it," said Abhishek Jain, tax partner at EY.

Companies have the opportunity to make sure that their reported monthly sales are in agreement with the final figures reported in the annual return through reconciliation of accounts. However, if any tax evasion is detected, the authorities will claim interest and penalty. The due date for filing annual returns for FY18, the year of GST rollout, is 31 December.

E-commerce platforms collect a 1% tax at source (TCS) when a consumer pays for a product bought online and deduct the same from the payment to be made to the seller of goods. This amount, paid to the government by the e-commerce platform on behalf of the seller, establishes an electronic trail of transactions and is available as credit for the seller at the time of meeting his final tax liability. The TCS is one of the self-policing tools of the GST system to track the extent of supplies.

After handholding the industry and traders for more than two years of GST rollout, authorities are now scaling up anti-evasion measures by using data analytics and technology. The idea is to use non-intrusive, electronic steps to identify areas of revenue leakage, for enforcement action. GST’s electronic return processing system shows red flags wherever it notices mismatches and enables the authorities to profile taxpayers and identify potential cases of tax evasion.

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