A top tax official said on Thursday that the Center intends to expand the scope of the goods and services tax (GST) in order to include more mom-and-pop businesses in the tax net.
The Center has been attempting to increase its tax income by including more of these activities because India has a sizable informal sector.
Businesses having an annual turnover of at least Rs 40 lakh are required to register under the GST system, which was established in 2017 and absorbed a variety of State and Center levies.
Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs (CBDT), in some industries where we believe the taxpayer base is too small compared to the size of the market, we may use a sectoral approach.
Moreover, the Center is developing a plan with state governments and will solicit their feedback in order to broaden the pool of indirect taxpayers.
As of January 2023, there are 1.4 crore firms that fall under the GST system, up from about Rs 60 lakh in 2017, according to Johri, who sees an opportunity to significantly expand the taxpayer base under the GST framework.
He said that one is the business-to-consumer (B2C) market and that the government will employ technology to target potential taxpayers without being overly invasive.
In order to strengthen the tax base, the government will access both private databases and data held by various government entities.
These databases could contain information about income taxpayers, property tax, business directories, and electricity distribution firms, among other things.
