Nirmala Sitharaman And Team All Set to Revamp GST on June 21; Mull Curb on Tax Evasion

Team Latestly

New Delhi, June 17: With the first federal meeting of the Goods and Services Tax (GST) Council planned for June 21, the Union Finance Ministry - led by Nirmala Sitharaman - is mulling steps to curb tax evasion in its first meeting itself. It is expected that Sitharaman might initiate plans to increase scrutiny on businesses.

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According to a report, published in the Hindustan Times, the BJP government is in a plan to increase the scrutiny after lower GST collections. The decline in tax collection has occurred post the first two years of the tax reform in the country. As per the speculations, the Union Minister is in a mood to curb tax leakage, initially on big businesses and eventually on all merchants. Nirmala Sitharaman, Finance Minister, to Chair GST Council Meeting on June 20; Likely to Reduce Items Under 28% Slab

In the 35th meeting of the GST Council, proposals before the Ministers to be tabled include compulsory generation of e-invoicing by large companies, validation of e-way bills (electronic permits issued for the movement of goods) with the data generated at toll plazas and geo-tagging of companies.

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The federal indirect tax body opines that this move would improve the transparency of transactions and act as an extra layer of regulatory oversight on transactions of large companies.

The most significant point of discussion would be tax evasion concern in the GST meeting. It has been noted that multiple uses of e-way bills generated for transportation of goods to suppress the actual value of the supply of items are being used by merchants. In order to tackle this, the GST council is planning to validate the e-way bills with the data generated by radio-frequency identification-enabled vehicles’ payments at toll plazas. This would not only curb the existing tax evasion practice, but would help the government keep a tab on this. Narendra Modi Govt Mulls Major Rejig in Labour Laws; Plans to Decrease Them From 44 to 4

Apart from this, the Council is also thinking to boost the existing safety feature in the GST framework. This feature includes the rebate for taxes paid on past transactions in the value chain, that forces buyers and sellers to keep a tab on each other. However, this is most likely to be limited business-to-business transactions initially, reports the daily.

Earlier it was noted that, Union Finance Minister, Nirmala Sitharaman is all set to chair the meeting of the GST Council on June 20. In the meeting is expected that the Union Minister would mull reducing the number of items under 28 percent tax slab, which till now is the highest in the GST tax bracket. Besides the reduction in GST rates, the other aspect the Finance Ministry is looking into is the interest rate subvention to boost employment and exports for MSMEs.