GST Evaders Set To Face Stricter Scans
The govt. is keen on catching the GST evading business and entities, as is evident from the latest developments. The Legal provisions on GST are being made more stringent and evasion proof for this. The GST authorities are now going to obtain the bank account details belonging to the brands and entities to check their tax returns and filings better. This will help them figure out the tax evaders and those who are tampering with the loopholes in the system. The Union government wants to plug revenue leakages of the state as well as central GST. A national-level conference will be held on 7th Jan 2020 to discuss and address this issue.
The collaboration
To tighten the noose around the GST evaders and rogue entities, the revenue department will collaborate with other govt. entities. They will, for example, collaborate with the state and central GST wing officials. They will also join hands with CBDT and the Financial Intelligence Unit later. The aim is to improve the compliance and GSTR-3B form filing process. The govt is stressing the usage of e waybills and revamped FASTag to track goods movement. The bank data will also be checked to assess the genuineness of applications. The fake filings will also get caught in the process. Despite the tightening of tax norms, a lot of businesses are exploiting the loopholes in the system and evading a huge amount of tax leading to a deficit in state and national revenue.
Fixing the loopholes
In the last few months, the revenue department has started fixing the loopholes in the GST filing system which allowed a chunk of businesses to evade paying tax or showing less than accurate figures as a return.
The CBIC, in alliance with GST Network, has identified the loopholes existing in the system. If the data filed in GSTR-1 does not match with that in GSTR-3B and the gap reaches the threshold of INR 1 lakh, the company owner or proprietors are sent reminders. This works in cases where the errors were caused by oversight.
The quick development
The GST Network serving as the technological backbone stores the GST data and that is sent to the union territories and states with a time lag. Now, the data will be supplied to the states faster. The development has been affirmed by Thomas Isaac, the Kerala finance minister. He is of the view, that real-time information can help the states catch the GST evading entities through advanced data analytics. This view was also echoed by the other state finance ministers earlier. However, any changes in the existing GTS law have to be made and approved by the GST Council- the apex body.
Summing Up
While the finance ministers of the other states agree with this view, some of them are skeptical if this measure will be able to address the overall revenue gap. The financial experts think access to data given to the states will surely lead to better compliance and evasion track eventually. Logistically, it should not pose a hurdle- they think. However, the proper implementation may still take some time.