GST under CAG lens: National auditor lists concerns; says full potential not achieved even after 2 years

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Updated: July 30, 2019 2:21:31 PM

Even as GST roll out completed two years, no process of system-validated input tax credit (ITC) system through invoice matching has been put in place, a CAG report on GST said.

The GST was launched on July 1, 2017, and has completed two years since then.

Even as GST roll out completed two years, no process of system-validated input tax credit (ITC) system through invoice matching has been put in place, a CAG report on GST said. In addition, non-intrusive e-tax system still remains elusive, said the report tabled in Parliament on Tuesday. The GST was launched on July 1, 2017, and has completed two years. The indirect tax was introduced as the biggest tax reform and showcased as ‘One Nation One Tax.’ Adding, the report said that the system has become prone to ITC frauds, owing to the complex nature of the return mechanism and the technical glitches leading to a roll back of invoice-matching.

The report also noted that the GST tax compliance system is non-functional in absence of invoice matching and auto generation of refunds, assessments and others. “The extent of changes, having to be now undertaken, as well as the suspension of the key aspects of the system, points to inadequate co-ordination among the stake holders such as Department of Revenue (DoR), Central Board of Indirect Taxes and Customs (CBIC) and GSTN as well as failure to try out the system adequately before roll out,” it added.

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In a recent written reply to the Parliament, the Minister of State for Finance Anurag Thakur told Parliament that the tax officials have unearthed  Rs 45,682.83 crore worth of tax frauds under GST in the last two years of its implementation.

The government data showed that an amount worth Rs 6520.40 crore was detected in the April to June period of fiscal year 2019-20. In the last two years, a total, 9,385 cases of GST frauds were reported in the last two years.

The GST was implemented on July 1, 2017, by the Prime Minister Narendra Modi-led NDA-1 government.

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