Skip to main content

GSTN plans data scan to detect tax evasion

By
GSTN plans data scan to detect tax evasion
The GST Network (GSTN) will soon float a request for proposal from data analytics companies to analyse data for tax evasion
With nearly 10 million taxpayers registering themselves on the goods and services tax (GST) network, or GSTN, the information technology backbone of the new indirect tax regime is initiating the process of mining data to detect tax evasion and analyse taxpayer behaviour.GSTN will soon float a request for proposal (RFP) from data analytics companies to analyse data after meeting central and state government officials and understanding their requirements.
To be sure, GSTN will start data analytics when it has sufficient data spanning a year.GST was rolled out in July this year and the tax returns started coming in August.“We are in the process of drafting an RFP because we want the tools and manpower for data analytics. We should be able to slice and dice the data whichever way we want,” said Prakash Kumar, chief executive officer of GSTN.
“Once the HSN code starts coming in for a few months, we will know which item is going where,” Kumar said, adding that the data can help tax authorities study region-wise patterns as well as user behaviour.Along with registration, return and payment processes, business intelligence analytics is also part of the GSTN’s mandate.
The data analytics providers will build an interface between the data and the tax authorities to help the latter detect tax evasion.R. Muralidharan, senior director at Deloitte in India said the entire sales and purchase data will be available with GSTN.
“The data can be used in many ways. Sales, purchases and margins could be compared to industry averages. Further, eventually, this data could be linked to the direct tax database to see if the profitability and subsequent taxes paid are in line with the turnover,” Muralidharan said.
GST is a destination-based tax that aims to remove barriers across states and integrate the country into a common market. The technology backbone of this tax requires all suppliers in the credit chain to upload their invoices onto GSTN for claiming input tax credit. This means that all suppliers are forced to document their sales and raise invoices. The government expects that the rollout of this tax will increase the taxpayer base, reduce the size of the informal economy and check tax evasion.
GSTN has already used some of the initial data trends to alert states about the tax paying pattern of some taxpayers; for instance, if a taxpayer is using input tax creditor or cash to pay the tax due. Input tax credit is the tax paid at every sale in the supply chain that can be claimed as credit. Some states like Karnataka, Maharashtra and Rajasthan are also matching the data with their earlier value-added tax database to understand the new taxpayer base.Of the nearly 10 million tax payers registered in the GST regime, around 7 million are old tax payers and 3 million are new.
The Mint, New Delhi, 18th December 2017

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

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more