The Centre and states are exploring ways to widen the GST taxpayer base and boost collections with a few states working on pilot projects to link third party data with that of the assesses.
Vivek Johri, chairman, Central Board of Indirect Taxes and Customs, said various strategies are being worked upon to widen the tax base. “Widening GST base would mean we have to see taxpayers who ought to be in tax net… are they there or not. This can be through more robust use of data from other agencies. Some states are working on various pilots,” he told reporters on Saturday after the 48th meeting of the GST Council.
Gujarat is working on PAN-based linkage of businesses while Madhya Pradesh is looking at exchange of data with power distribution companies. Maharashtra is doing a pilot on sharing property tax data and geo tagging business and linking with their property.
Explaning how the data sharing with discoms would work, Johri said the department would match the data base to see who are electricity consumers with commercial use connections and are not in the tax department data base.
“The missing link can be detected if the property or electricity connection is registered for commercial use but not registered under GST,” he said.
Earlier, Union finance minister Nirmala Sitharaman in response to a question on GST collections had said, “Not just me, but many members… not discussed today, but as and when we interact, are also concerned about widening the tax base…. most of us agree, at every level, attempt to widen the GST base. The focus will be on how much all of us are putting an effort towards that, so that States and Centre put in an effort to widen the tax base.”
Sitharaman, who chairs the GST Council, noted that a trend has emerged over the last six to seven months of GST collections amounting at over Rs 1.4 trillion with April recording a mop up of Rs 1.6 trillion.
There are about 14 million businesses registered under GST.
The council in its meeting also took a number of measures to streamline compliances under the indirect tax levy.
It approved a proposal to conduct a pilot in Gujarat for Biometric-based Aadhaar authentication and risk-based physical verification of registration applicants.
“Amendment in rule 8 and rule 9 of CGST Rules, 2017 to be made to facilitate the same. This will help in tackling the menace of fake and fraudulent registrations,” said an official release.
It has also formalised a measures to restrict misuse of PAN of a person by unscrupulous elements. PAN-linked mobile number and e-mail address (fetched from CBDT database) will be captured and recorded in FORM GST REG-01 and OTP-based verification will be conducted at the time of registration on such PAN-linked mobile number and email address.
Significantly, the GST Council has also approved issuance of a circular spelling out the procedure for verification of input tax credit in cases involving difference in input tax credit availed in Form GSTR-3B vis a vis that available as per Form GSTR-2A during fiscal 2017-18 and 2018-19.
Tax experts believe this is one of the most controversial issues plaguing the industry currently. When the GST law was very new, there were no reports available on the GST portal about the invoice reported by the suppliers through GSTR 2A.
“This issue has been a subject matter of debate between the taxpayers and GST officers during the return scrutiny and tax demands have been confirmed basis the GSTR-2A, which was not even prevalent during the said period,” said Saket Patwari, executive director, Indirect Tax, Nexdigm.
