Govt plans e-way bill on gold to check GST evasion
The government is thinking of introducing the e-way bill on the movement of gold to plug evasion and arrest declining goods and services tax (GST) collections.
To ensure that movement of gold is not tracked by robbers or other anti-social elements, an encrypted version of e-way bill is being considered by a panel comprising central and states officials.
“The e-way bill on gold is being examined by the law committee as a measure to tighten enforcement amid reports of GST evasion. But at the same time, it will not be easy amid security concerns. To address that, an encrypted version is being discussed,” said a government official.
Currently, the movement of gold is excluded from the e-way bill system.
Kerala has pitched for its inclusion in the e-way bill system. According to Kerala, in the pre-gst regime, the revenue collected from tax on gold was approximately ~630 crore a year, at an effective tax rate of 1.25 per cent, as the state had composition scheme. However, at the existing 3 per cent GST on gold, the revenue earned was just ~244 crore last year.
Kerala is of the view that it is very easy for dealers to carry gold in suitcases and make a sale on the customer’s premises. The matter was also discussed in the GST Council meeting in June. Haryana has also pitched for implementa■ E-way bill introduced on April 1, 2018, for inter-state movement of goods worth over ~50,000
■ The bill for movement of goods intra-state was introduced phase-wise. The roll-out was complete on June 3, 2018
■ The bill is not introduced for
movement of gold because of
tion of an encrypted e-way bill within a fixed time.
“This might be a good way to address the security concern around movement of gold and help plug the tax leakage. However, given the nature of the commodity, administrating the e-way bill mechanism may not be easy, given that transportation may not require bigger vehicles. In this sector, incentivising the customers to purchase on payment of tax is also very important,” said Pratik Jain, partner, PWC India.
According to the report on revenue neutrality by former security reasons. Now, some states are pitching for its inclusion, fearing tax evasion ■ The government is working on measures to plug tax evasion
■ Law committee, comprising central and states officials, deliberating over the issue
chief economic advisor Arvind Subramanian, the expected revenue from gold at 5 per cent tax was ~10,000 crore.
Abhishek Jain, tax partner at EY, said: “Where the security concerns are well addressed through technology, implementation of e-way bills should help check tax evasions on supply of gold.”
The government had introduced the e-way bill system in 2018 for movement of goods worth over ~50,000 inter-state and intra-state.
“The e-way bill has played a major role in curbing certain leakages in the GST chain. Going forward, encrypted e-way bills for high-value products, further linkages with invoices for assessment, and input tax credits should be expected,” said M S Mani, partner at Deloitte India.
Some members of the law committee are, however, of the view that some other measures of enforcement must be arrived at other than an e-way bill, as it could lead to security breaches.
Besides, the threshold of ~50,000 was too low for a precious metal like gold. At today’s rate, ~50,000 will mean only 12-15 gms of gold.
GST collection fell to a 19-month low in September this year at ~91,916 crore, which was 2.67 per cent lower than in the corresponding month a year ago and 6.4 per cent lower than ~98,202 crore in August. This prompted the government to constitute a committee of officers to discuss ways for revenue augmentation.
The 12-member panel, which has five members from the Centre and states each, is also looking into issues such as systemic changes in GST to prevent misuse, measures for expansion of the tax base, improved compliance monitoring, and anti-evasion measures using better data analytics and administrative coordination.
The government is also working on tax evasion plugging measures, including new return formats, an e-invoicing system, and mandatory e-ticketing for movie theatres, among others.