The apex decision-making body for the goods and services tax (GST) regime will meet on Saturday to discuss implementation of electronic bills for goods transporters (e-way bill) and reverse charge mechanism (RCM). Both these provision had earlier been deferred by the GST Council to ease compliance burden on taxpayers. The council is expected to look for ways to shore up flagging GST revenue — which declined by nearly 12% in October to Rs 83,000 crore compared with the average collection of Rs 90,000 crore in the preceding three months. In a meeting of tax officials last week, the officials estimated that November revenue will see further decline and this may be due to delayed implementation of many GST provisions like invoice-matching, e-way bill and RCM, among others.
Under the e-way bill provision, the transporter of goods is required to generate a bill electronically on the GST Network portal for carrying goods worth more than Rs 50,000. Similarly, RCM requires a registered purchaser to collect taxes from an unregistered supplier to discharge the liability to pay GST on behalf of the supplier. In the normal course the liability of paying taxes is on the supplier. These provisions were deferred till March 2018 by the council after widespread complaints by taxpayers over increased compliance burden. But it has created a blind spot for the government as the tax department is unable to verify many refund and input tax credit claims. Similarly, deferment of the e-way bill has led to duty evasion as interstate check posts were done away with after GST was rolled out in July.
“We have estimated that tax evasion of nearly Rs 10,000 crore may have happened in Bihar since July due to suspension of e-way bill provision,” Bihar deputy chief minister and finance minister Sushil Modi said on Friday. He added that the comparative tax collection data suggested the need to implement it sooner than earlier decided. Similarly, Jammu and Kashmir finance minister Haseeb Drabu batted for the implementation of RCM as it was hurting small businesses from being part of the supply chain with larger firms. Last week, tax officials from central and state governments had met to analyse GST revenue trends.
The deferment in filing the comprehensive triplicate form (GSTR-1, 2 and 3) — meant for invoice-matching mechanism — to next year
was held responsible for the inability of tax departments to verify nearly Rs 65,000 crore of transitional credit claims. Sources said that while the government isn’t convinced the system was ready for filing detailed returns, it would try to plug other loopholes to mitigate revenue slippages.