As evident from the current amendment in GST and its implementation, also the simplification made in GST credit input return, it seems as if the Government and the Tax department are working in collaboration to sort out all the discrepancies and fallouts of the process in order to make the system apparent and transparent.
In addition to this, according to the sources, the Tax department has decided to link the power connection of some of the major manufacturers of India to GSTIN (GST Identification Numbers). This step has been taken by the tax department to find out the sync between the power consumption in the manufacturing unit and the final production or the turnover. According to a Tax official, the IT system of the GST network would be taking care of the same. This is going to help and check the fake consumption.
Also, it would act as a signal to the manufacturing units that the Tax officials are aware of the power consumption in the Firm. The idea is going to be implemented soon just after the original return filing system is updated correctly. Delay is just due to the complex design and some technical issues.
Meanwhile, the Taxpayers use to fill the summary return GSTR-3B and the GSTR-1 to show their outward sales.
The system of linking the power connection to GSTIN is going to work in the same way as the e-way billing system. The e-way billing system is like; reporting is required for any movement of goods over and above 50,000. This acts as a signal to GSTN to link the supplies made to taxpayers and the total sales declared by him in return. If there is any discrepancy it will automatically become evident.
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Only a few taxpayers, about (500-1000) are decided to be monitored under the ambit of this rule. The taxpayers whose turnover ranges from 10-100 crore will fall under this category. The idea of linking the electricity connection to GSTIN is to keep a check on the big power consumption units which could largely affect the power consumption and tax.
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According to the logic, the tax department may take the power consumption may be as high as lakh but still, the GST liability comes at a very low figure which clears the air above the tax evasion. This kind of linking would certainly provide much deeper statistics of a firm who is into a large business production but after making some clever moves, drops down its GST liability at a minimal level.
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The state-owned power distribution companies (Discoms) who provide power to these units are asked to share their power consumption pattern in this context, reported another Tax official. The system is likely to become functional early next year.
