Govt banking on e-way bill to boost GST compliance
NEW DELHI: Suspecting massive tax evasion under the goods and services tax( G ST) regime, the centre is banking on the new e-way bill system as well as the transaction trail that will be established once businesses start filing detailed sales returns to bring tax evaders to task.
While all states will implement the e-way bill system for interstate movement of goods from February 1, taxpayers have to file the GSTR-1 form relating to supplies for the initial few months by January 10.
The GSTR-1 form requires the supplier of goods to specify details of the supply as well as that of the recipient. These details will then get automatically filled in the tax return form of the recipient, thereby ensuring a transaction trail and compliance.
The government had deferred the deadline for filing GSTR-1 multiple times to give taxpayers more time to aid a smooth transition to this new tax regime.
According to the revised filing schedule released on Friday, small businesses with revenue of up to ₹1.5 crore can file the first quarterly GST return (for July-September) by January 10. Entities with turnover above ₹1.5 cr ore have to file monthly returns relating to supplies for the July-November period by January 10.
“Once GSTR-1s are filed on a regular basis, some enforcement measures could be adopted. That includes field officers checking whether the recipients of supplies identified in these returns have also filed returns and paid their due taxes,” an official with knowledge of the development said on condition of anonymity.
From February 1, an e-way bill will have to be generated for all movement of goods—within or outside a state—amounting to more than ₹50,000, by prior online registration of the consignment. The supplier and the transporter can upload the details about the shipment and get a unique e-way bill number. Tax authorities in states can then compare the details in the e-way bill with the actual shipment.
The government suspects many business-to-business transactions are being kept off the books and payments done in cash to avoid paying GST. Additionally, it also suspects underinvoicing of goods.
In an audit of the composition scheme, the government found that the 600,000 taxpayers who filed tax returns under the scheme paid only ₹251 crore for the July-September period.
Under this scheme, taxpayers with turnover of up to ₹1.5 crore have the option of paying a minimal rate of tax and filing a simplified tax return.
Implementation of the GST was expected to expand the taxpayer base and curb tax evasion.
However, lenient implementation saw tax collections fall progressive ly, prompting states and the centre to take corrective measures. Industry now fears harassment as authorities move aggressively to shore up tax collections.
“With the e-way bill system, the government is rolling out something for which it may not be completely prepared. It could turn out to bea fiasco if not properly implemented. There is a fear that once again we may land up in the same situation as before when the government had to stagger implementation of compliance requirements like extending the dates for return filing,” said Suresh Nandlal Rohira, a partner at Grant Thornton India Llp.