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From bank info to e-way bills, govt eyes more data to curb tax evasion

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From bank info to e-way bills, govt eyes more data to curb tax evasion

New Delhi: The Union government has signalled its intent to tighten scrutiny of businesses.

For this, it is proposing to mine all data points, not just limited to direct and indirect taxes, but extending to transaction information collated from banks, details disclosed to the ministry of corporate affairs and the shops and establishment department of states and data collected from e-way bills.

All of this will be part of the fraud analytics infrastructure the government is creating for indirect taxes. It will entail building a risk profile of the taxpayer using information such as sales, purchases, links with suspect firms and dealings in sensitive commodities under the goods and services tax (GST).

The government is hoping that fraud analytics of the massive amount of information collected from various sources will help in plugging revenue leakages under GST by identifying methods employed by taxpayers to avoid paying taxes.

The GST Network has circulated the draft request for proposal to hire fraud analytics providers. Their mandate will include analysing data generated from the e-way bill system and tax return forms, identifying fraudulent patterns, performing tax rate sensitivity analysis, helping in policy formation and preventing revenue leakages.

The firms will also be mandated to suggest rule changes to plug loopholes and prevent such frauds.

After detecting instances of frauds and tax evasion under the new indirect tax regime rolled out on 1 July, the government hastened the process of starting fraud analytics on GST data to catch tax evaders.

“The whole structure of the GST Network is such that tax evaders are detected through the transaction trail. Information from different sources should help to track evaders both of direct and indirect taxes,” said N.R. Bhanumurthy, a professor at National Institute of Public Finance and Policy.

The government is hoping that the anti-evasion measures will boost revenue.

While the e-way bill was made mandatory from 1 April for inter-state movement of goods, invoice matching is expected to start in the next few months with the GST Council looking to finalize the tax return forms in its 4 May meeting. Other measures, such as the reverse charge mechanism under which registered dealers have to pay tax on purchases from small unregistered dealers, are expected to come into force later this year.


The Mint, New Delhi, 03 May, 2018

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