Page 38 - GSTL_20th August 2020_Vol 39_Part 3

J70 GST LAW TIMES [ Vol. 39
simplified returns progressed, it was felt by the GoM that the two return formats
had become similar to GSTR-1, 2, 3 system in complexity. These returns were
deployed at the time of GST launch in July, 2017 but had to be junked within
months for being cumbersome.
It was argued by the Constituents of GoM that already deployed im-
provements in the existing system along with changes in the pipeline was a
much less disruptive path to strengthen the return system. So far, improvements
like allowing Nil return filers (as much as 20% of the total GST taxpayer base of
1.2 crore) through SMS for monthly return, enhancement of GSTR-2A (which
provides details of purchases made by a taxpayer and can be cross-referenced
with GSTR-1) have been deployed.
Along with other proposed improvements and introduction of
e-invoking for taxpayers above ` 500 crore turnover threshold from October 1,
the return-filing system is expected to be more efficient. E-invoicing has been
billed as a ‘game changer’ by the Tax Department as the system would bring
about auto-creation of returns in real time for all B2B businesses eventually.
[Source : The Financial Express, New Delhi, dated 10-8-2020]

Implement GST, to Boost Direct Tax

The Government’s tax transparency initiative with faceless assessment
and appeals and a taxpayer charter is welcome. Corruption depends on human
interface and the misuse of arbitrary powers by taxmen. That must go. Contact-
less assessment will minimise the interface between the assessing officer and the
assessee, and improve compliance. Tax officers must also desist from making
high-pitched assessments in their zeal to meet collection targets. Launching the
platform for ‘Transparent Taxation - Honouring the Honest’, Prime Minister
Narendra Modi urged people to introspect and pay their tax dues. However, the
way to increase Direct Tax collections is to clean up the Goods and Services Tax
(GST), which generates audit trails to income currently escaping tax.
Nearly 66% of the total tax collections in the country come from Indirect
Taxes that are borne by the rich and poor alike. The share of Direct Taxes in total
tax revenues must rise. The mining of GST data and electricity bills makes it em-
inently feasible. The gross value added for the economy is equal to the gross
profits plus wages and salaries. It holds at the firm level and can be used to esti-
mate the value added by each production unit, and its distribution to taxable en-
tities. Electricity bills and Employee Provident Fund payouts must tally with the
claimed production and value-added levels.
Many small units are outside the formal banking system. The remedy is
to extend the reach of formal finance, make small units keep books and bring
these into tax net. Data analytics must be used to track the physical volumes of
raw materials along their production chain ending in taxe-evaded goods. If gar-
ments evade taxes, the suppliers of the fibre that is spun into yarn later converted
to fabric should be asked to furnish the details of all their Customers. These
should be traced, and their customers, and so on. Reverse charge should be used
more widely, also be universal so that buyers can pay tax on their purchases di-
rectly to the Government while recognising the vendor on whose behalf the tax is
being paid.
[Source : The Economic Times, New Delhi, dated 14-8-2020]

GST LAW TIMES  20th August 2020  38
( A70 )