Technology And New Software To Help Prevent GST Evasions

The reports of tax evasion are not new. Taxpayers have even managed to find ways to evade taxes in the new Goods and Services Tax (GST) regime. However, the government is now equally prepared to control these tax evasion activities with the help of technology.

GST Network is reportedly working on a new kind of software which will make use of data analytics to identify and prevent such activities. The new GST Software will also help identify taxpayers who are managing to evade taxes by wrongly reporting lower or zero tax liability. The new technique will also identify and report those big merchants who are wrongly registered under the GST composition scheme in order to avoid taxes.

Analytics to Catch GST Evasion

According to GSTN’s CEO Prakash Kumar, the network now has quite a lot information/data uploaded by small to big merchants during the past one year of GST. This includes data of products, product value, input price, sale and purchase details, value addition and more as provided by taxpayers while filing their GSTR-1 and GSTR-3B returns online. The data analysis software on the network will now make use of all this information to find and prevent tax evasion. It will also automatically send notices to guilty parties.

The GST composition scheme which was initiated with the purpose to provide some tax relief to small merchants is being wrongly utilized by many big merchants. As of now, more than 19 lakh dealers around the country are registered under the composition scheme, while the tax revenue from this sector is not more than 500-600 crore per quarter (3 months).

As per the composition scheme rules, only merchants who have an annual revenue of less than 1.5 crore rupees are eligible to register under the composition scheme, however, many other merchants whose annual revenue is far more are also registering under the scheme by showing limited income. Thus, they are paying only 1% of the annual revenue, instead of the liable tax.

Govt Launches an App to Easily Identify GST Registered Businesses

The government is working on advanced GST software and systems that will help prevent tax evasion to a great extent. A new GST Verification app was recently launched by the Income Tax Department which can be used by consumers and small dealers to find all the information about a particular GST registered dealer and whether they are eligible to charge tax on certain items and how is this tax being paid to the government.

Apart from government GST software, there are certain GST compliance softwares which are well known for their accuracy and feature-rich list. Gen GST software is a perfect billing and e-filing software for CA and individual taxpayers.