GOI to Bolster Digital Payment to Step-up GST Revenue

Tax officials lay a bad trip on B2C sales as a major reason behind emanation of government revenue that comes in the form of goods and services tax (GST). B2C transactions are prone to tax skipping as consumers pay in cash for products & services to the shopkeepers without generation of bills by them. To curb this tax evasion, tax authorities are looking forward to incentivising the digital payments.

At the first national GST conference in the presence of senior officials from different parts of the nation and where the issue was tossed around, it was concluded that if the B2C channel is monitored properly, the revenue can be increased by 15-20%. 

Government is trying to stop the tax evasion practices for which it has taken many measures such as keeping a hawk-eye on industrialists who claim fake Input Tax CreditThe government has identified hundreds of fake companies taking input tax from the government in the name of the goods and services tax (GST). Now the government is set to take action against them. Read More or claims ineligible ITCs and temporary businessmen who often disappears after claiming ITC.

Now, the tax department is zooming in the chain of the transaction to discover the squirting point of GST. However, at the same time tax officials are disquieted that a parallel system is existing under which the complete chain of transactions from a raw material supplier to input manufacturers to finished goods producer, are prone to tax evasion. 

The tax experts are laying blame on high GST slab ratesGrab the information of revised GST slab rates on consumer products in India, Although, the GST council finalized the slab rates like 5%, 12%, 18% and 28%. Read More for tax evasion in B2C sales, to sort the issues out Central Board of Indirect Taxes and Customs (CBIC) is foreseeing consumers making digital payments because that can be an efficient tool to restrict the tax evasion and so to increase revenue for the government.

Many ideas have been discussed among the tax authorities at the Centre and some of them have been put before the tax officials and solicited their feedback.

Lottery and QR Code-based transactions is another method, the heads of tax officials were put together to incentive the electronic payment by way of credit card loyalty programmes, collecting earning points for rewards etc, provided that the rewarding/earning points can be redeemed when the Government e-Marketplace (GeM) is allowed for retail transactions.

Officials were directed to keep the taxpayers under surveillance so that revenue targets can be met because more often genuine taxpayers are mulled over by the tax dept while the tax evaders are eschewed.

The uniformity issues that GST is interpreted in different senses in different states were also highlighted by the tax authorities in the meeting under the chairmanship of revenue secretary Ajay Bhushan Pandey.

Besides, issues like new GSTR forms, e-invoicing under GSTGet to know about the new E-invoice generation system on government GST portal with applicability. The system mandates to generate e-invoice for every sale by a registered business. Read More were spelt out in the conference along with an evaluation of revenue trends, which concluded that reduced import is a major cause behind economic downturn despite the growth in domestic stock like that of automobiles.