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…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…