Skip to main content

Govt plans to link GST with PAN


The Centre is planning to integrate the direct and indirect taxation systems for all indirect taxpayers by linking the GST number with the permanent account number (PAN) issued by the income tax department, reports SHRIMI CHOUDHARY

With the advent of goods and services tax (GST), the Centre is now planning to integrate the direct and indirect taxation systems for all indirect taxpayers by linking the GST number with the permanent account number (PAN) issued by the income tax (I-T) department.

The move aims at curbing tax malpractices, as cross-checking I-T payments with GST payments is expected to prevent tax evasion.The move would also bring the GST-PAN
linked system in line with the prevailing PAN-based system for I-T facilitating data exchange and taxpayer compliance.

A PAN-linked system will provide correlation between the payment of direct and indirect taxes and also within the tax authorities administering them, said a senior tax official. Explaining the advantage of having a PAN-linked number, the senior tax official said PAN had an all-India presence. It has the single-largest base of 240 million against 6.56 million registrations, which have been so far made on the GST Network.

Tax experts say that the move will equip tax authorities to ensure taxpayer compliance. “The Centre should be expected to eventually create a relevant management information system to ascertain the total sales reported under GST and seek reconciliation with information available with the I-T department,” said Uday Pimprikar, tax partner, EY India. The revenue department had earlier examined a proposal to use Aadhaar for the purpose, but it was dropped since Aadhaar would be issued only to citizens while the business identification number would be for all legal entities, including individuals, companies and partnership firms.

The tax department has already received several concerns about the migration and implementation of GST. “The industry has concerns on the limited number of GST service providers presently approved and the reliability of the linkage between the firms and application service providers. Some concerns will also be on the ability of micro and small retailers to be able to submit online returns,” said Suvodeep Rakshit, senior economist, Kotak Institutional Equities.

Although the industry has largely welcomed the move, experts say there would be short-term disruption. It would take time for the entities to adjust to the new framework of input tax credit. The move aims at curbing tax malpractices, as crosschecking I-T payments with GST payments is expected to prevent tax evasion

Business Standard New Delhi, 30th June 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…