Skip to main content

More compliance, less black money

By
For all those who thought that GST was just an indirect tax reform, think again.
The implementation of GST will affect direct taxes as well, helpinwideningthetaxbaseand increase taxe collections.
According to tax administrators, GST will help in curbing domesticblackmoney.“Though it is a reform for indirect taxes, there are filers who understate incomes by not reporting transactions. By doing this, they save excise, VAT, Octroi etc, and under-report their incomes. Since, GSTwillhaveapapertrail, which can be accessed by the income tax department, such practiceswilldiscouragegeneration of black money in the system,” a tax official said.
Permanent account number (PAN) and Aadhar will be used more frequently, and will be requiredtofileGSTreturns. This willhelpthetaxmentracktransactions more systematically. Therecanbemoredatamapping forauditbyrevenueauthorities.
Last year, a panel headed by chief economic adviser Arvind Subramanian had said that bringing alcohol, real estate and precious metals, including gold, withintheambitofGSTwillhelp curb blackmoney in the sectors.
Though alcohol is likely to remain outside GST, the other two key sources of illicit money are likely to get busted.
Both the Central Board of Direct Taxes and the Central Board of Excise and Customs havestartedsharingdatatomonitortheflowofblackmoneymore effectively, sources said.
“If a retailer has purchased goods from a wholesaler and is notshowingthatpurchasetoday, he will not be able to do so after GST,” ataxofficialwiththeDelhi government said.“To substantiate his purchase, he will have to maintain the books of sales, for which proper bills will be generated. SoanytraderafterGSTwill not be able to sell products or goods without bills. Once a bill is in the system, scope for black money reduces automatically.”
The dual-monitoring structure proposed within GST, involving the Centre and the states, willalsocurbtaxevasions. So, even if one set of tax authorities overlooks or fails to detect evasion, there is the possibility that the other authority may not.
Hindustan Times New Delhi,05th August 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more