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GST has safeguards to check tax evasion
September, 18th 2017

If some traders and businessmen are trying to hoodwink the system by suppressing part of cash based transactions with the connivance of consumers, they will be doing so at their own peril, warns the Commercial Taxes department.

GST came into vogue only two months ago and the focus is more on bringing every one into the GST platform.

“ The department is not in fault-finding mode at present and we want people to fall in line on their own,” say a senior official. Some cases of violation here and there cannot be generalised and they will be eventually exposed, he said.

The GST is devised in such a way that they are many trails to trace those evading the tax and Input Tax Credit is a big give away and the traders are well aware of it.

“ About 45,000 to 50,000 or more traders registered under the GST so far because of the realisation they cannot escape it and there is no advantage in not complying with it because of ITC,” said a Finance department official.

The commercial tax department has been making random inspections. But once the GST system stabilised totally, vigilance will be stepped up, they add.

The official sources do not agree with consumers’ observation that they are paying more on some goods and services under GST regime. It is more of a perception, they point out.

“The excise tax was inbuilt in the earlier regime. In the new regime, the tax structure was simplified but made transparent and hence the perception among some consumers that were paying more tax,” they said.

The tax rate under GST came down on some goods like cement, steel, cars and some food commodities. In the case of some goods and services, the increase was not beyond one or two percent than what was charged earlier, they explain.

Yet the feedback from consumers is being looked into and will be taken to GST Council if there is a need for rationalisation, they assured.

The digital transactions that registered a hike post demonetisation and ensured transparency in transactions hit a plateau with improvement in cash flow. Does government have plans to increase payment by card to bring in transparency into the system?

Sources say it is a personal choice. But whether one pays by cash or card, it will not be making a difference to the tax collected. The system has enough safeguards to check tax evasion.

The focus on digital transactions continues and Telangana leads in the country, say Finance department officials. The State is working towards linking bank accounts to Aadhar numbers hundred per cent from the present 86 per cent. The move would bring in security and greater comfort in digital transactions and therefore transparency.

‘Not perturbed’

Meanwhile Finance department is not perturbed about slight decline in tax revenue receipts after GST roll out. One of the reasons is glitches in filing returns by some traders and they are being addressed.

“We are not perturbed by it. GST system yielded better results everywhere in the world. Then why not in India?” is their optimism.

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