Finance Minister Arun Jaitley on Wednesday said that the recently introduced Goods and Services Tax (GST) regime will have an impact on direct taxes too, indicating that collections of direct taxes could swell once GST gets implemented in full force in coming days.
“The impact of GST will not only be on indirect taxes, but on direct taxes also. The possibility of detection of escaped income is high as GST ushers in transparency,” Jaitley said after releasing a Wolters Kluwer book on income tax here.
He highlighted that the extent of compliance would get clearer when the GST implementation gets into the sphere of ‘matching of Bills’ for input tax credit purposes.
“It will pay you (taxpayers) to be honest,” Jaitley added.
He highlighted that there is only one colour of money left in the country. “If you look at each of the steps which we have been taking — we first gave an opportunity for people holding money outside the country to declare and come clean. We have rewritten many of the treaty provisions that facilitated round tripping (Mauritius, Cyprus and Singapore). And we have also implemented the Benami Law,” he said.
From a period of 1988 to 2014, the Benami Prohibition Law passed by Parliament was never implemented. Jaitley also underscored the need to reduce the quantum of cash in the economy. He said that the demonetisation exercise undertaken in November last year had helped increase the income tax base of the country.
Shireesh Sahai, Chief Executive Officer, India, Wolters Kluwer, a leader in information services and solutions for professionals in health, tax and accounting, said that the government’s digitalisation drive and regulatory changes in recent months had positive impact on the economy.
“The three pillars of Digital India, Skill India and Make in India are enshrined in our growth strategy in India,” he told BusinessLine.
Sahai said that most of Wolters Kluwer solutions are cloud based and available on smartphones. “We are developing software in India that caters to the rest of the world. Nearly 700 people out of the 1,000 professional workforce we have are engaged in software development,” he said.
Finance Minister Arun Jaitley with Justice AK Sikri launching a book ‘Concise Commentary on Income Tax’ in New Delhi on Wednesday