UP lacks mechanism to track sector-wise revenue collection

No clear answer to whether slowdown is affecting the state also

LUCKNOW : More than two years after the Goods and Services Tax (GST) came into being, Uttar Pradesh has not been able to develop a mechanism to find out the sector-wise rise and fall in revenue collection under the new tax regime, experts say.

That is why there is no clear answer to whether the country’s current slowdown is affecting the sale of consumer goods and services in the country’s biggest state as well, they add.

“Under the GST (regime), we do dealer-wise monitoring of tax collection and not item or service-wise,” commercial tax commissioner Amrita Soni admitted.

“However, we can do itemwise analysis as well with regard to certain items if needed,” she added.

The GST regime led to the merger of indirect taxes like sales, service, luxury and entertainment taxes.

At present, the authorities are sure the countrywide slump in the auto sector is affecting the sale of cars in UP too and this is evident from a decline in transport department’s revenue that comes as one-time tax from the registration of new vehicles. They, however, have no clue as to from which other commodities under the GST the tax collection has risen or fallen.

Tax collection that comes from the sale and purchase of goods and services in any state is an important indicator of a boom and a slump in a particular sector in that state.

Sources in the department, however, disclosed that unlike under the Value Added Tax (VAT) regime, when an itemwise or sector-wise analysis of revenue collection was made, under the GST there is no such system in UP, like in most other states.

“Before the GST came into force in the country on July 1, 2017, we had hundreds of columns to record revenue collection from each sector separately and this made it possible for us to know which sector is doing well and which is not and take steps accordingly,” said a senior official requesting anonymity.

Sources said the format for filing returns under the GST regime was such as it made it impossible to make sector-wise analysis of revenue collection. This, they said, had a lot of disadvantages when it came to planning things on the basis of rise and fall of tax collection in a particular sector.

Former additional commercial tax commissioner (Law) Bharat Singh said it was one of the biggest drawbacks of the GST regime that authorities did not have a system of knowing commodity-wise or sector-wise progress of tax collection.

“How will you get to suspect possible tax evasion, by a dealer who deals in many products unless you have a system in place to make commodity-wise analysis of tax received from each and every item it sells or supplies in the market ?” he questioned.

Without a sector-wise analysis mechanism, the former tax official pointed out the government may not be able to assess the impact of economic slowdown on the goods and services that fall under GST as tax collection from a particular item indicates the consumption trend about that commodity.

“Under VAT, we would use the input from item-wise analysis of revenue rise and fall to plan many things, including strengthening enforcement to check evasion and give relief to a stressed sector,” Singh said.

UP, he suggested, must develop an independent system for making sector-wise analysis of revenue collection without waiting for the Centre to make necessary changes to the return filing format. “This is perfectly doable,” he claimed.

WITHOUT SECTOR-WISE ANALYSIS MECHANISM, THE GOVERNMENT MAY NOT BE ABLE TO ASSESS THE IMPACT OF ECONOMIC SLOWDOWN ON THE GOODS AND SERVICES THAT FALL UNDER GST