GST will also impact direct tax collection: FM Jaitley
NEW DELHI: Finance Minister Arun Jaitley on Wednesday said that the Goods and Services Tax (GST) is bound to impact the direct tax collection as well due to the increased detection technology and greater compliance.
"To claim input tax credit under GST, people need to disclose their volume of transactions. There is bound to be a corresponding impact on direct tax," Jaitley said here during a book launch event.
"Therefore, the impact of GST will not only be on indirect taxes but also due to the efficient system, on direct tax. The possibility of tax detection is very high because of technology," he said.
The Finance Minister said that even before GST was rolled out, the impact of demonetisation has expanded the number of assessees under the personal income tax.
Two months after the rollout of GST, Prime Minister Narendra Modi on Wednesday said apprehensions with regard to the indirect tax regime have been proven to be unfounded and a smooth transition has happened.
He asked chief secretaries of all states to further boost efforts to increase registration under GST (Goods and Services Tax) and to achieve a quantum jump in this regard within a month, a PMO statement said.
The prime minister was chairing his 21st meeting of Proactive Governance and Timely Implementation (PRAGATI), a monthly interaction with top officials of states through a vide conference.
GST was rolled out on July 1, ushering in a uniform indirect tax system in the country.
The last 20 meetings of PRAGATI have seen a cumulative review of 183 projects with a total investment of Rs 8.79 lakh crore, according to the PMO statement.
Resolution of public grievances has also been reviewed in 17 sectors, it said.
In Wednesday's meeting, the prime minister reviewed the progress of nine vital infrastructure projects worth over Rs 56,000 crore in the railway, road, power and oil pipeline and health sectors, the statement said.
These projects are spread over several states including Uttar Pradesh, Madhya Pradesh, Gujarat, Haryana, Rajasthan, Maharashtra, Uttarakhand, Punjab, West Bengal, Karnataka, Tamil Nadu, Andhra Pradesh, Bihar, Odisha, Telangana, and Kerala, it said.
He reviewed the progress towards handling and resolution of grievances related to patents and trademarks.
He noted the improvement in performance and asked the officers concerned to work towards further expediting the processing of patent and trade- mark applications, the statement said. Officials explained the steps taken towards speeding up the grant of patents and trademarks, including enhanced manpower, it said.
The prime minister emphasized the importance of using latest available technology, to streamline the process, and reach global standards in this regard, the statement said.
The projects reviewed on Wednesday included the DelhiMumbai Industrial Corridor (DMIC), and construction of four new AIIMS at Manglagiri in Andhra Pradesh, Kalyani in West Bengal, Nagpur in Maharashtra and Gorakhpur in Uttar Pradesh. NEW DELHI: Finance Minister Arun Jaitley on Wednesday said the government will adopt a carrot-and-stick policy on taxation, saying post GST tax authorities will go after evaders whose invoices do not match tax payment.
He asserted that the government over the last 2-3 years has made tax evasion difficult that has come as a "rude shock" to many, and GST will help expand the direct tax base in line with increase in indirect tax collection. "Even in the case of GST now, we are just having the initial voluntary compliance today going on. When the matching of bills takes place, whether that voluntary compliance is fair and to what extent will become clear," he said.
"The experiment of first 1-2 months will demonstrate to assessees that today the mantra as far as taxation is concerned is 'it pays to be honest'. The queries will only be addressed to those whose vouchers don't match," he added.
When the volume of indirect taxation grows, there is bound to be a corresponding impact on direct tax income, he pointed out.