In a resplendent celebration marking six years of India's revolutionary tax regime, the Goods and Services Tax (GST) has emerged triumphant, astonishing even the most ardent critics. With ambitious aims of transforming the tax ecosystem and boosting revenue, this transformative system has garnered an overwhelming response from the majority of taxpayers.
The remarkable success can be traced to the average monthly collection has skyrocketed from Rs 82,200 crore to an astonishing Rs 1,72,000 crore in just the first two months of the current fiscal year.
The Goods and Services Tax (GST) officers are making significant progress in their efforts to identify fake invoices and fraudulent claims. So far, they have successfully busted 304 syndicates involving 9,000 fake GSTINs (GST identification numbers) and uncovered deceitful input tax credit (ITC) claims amounting to Rs 25,000 crore.
Buoyed by this remarkable progress, the Central Board of Indirect Taxes and Customs (CBIC) Chairman, Mr Vivek Johri, has announced plans to tighten the return filing system to thwart fraudsters misusing PAN and Aadhaar identification to obtain illicit GST registrations.
Join us on this exhilarating journey as we delve into the remarkable achievements of GST, heralding a new era of fiscal triumph in India.
Only 40% of the corporate income taxpayer base is registered under GST
Comparing the usage of geotagging technology to the existing approach, which depends on corporate self-declaration, would be a vast improvement. Self-declaration is not always precise, and it can be challenging to confirm the integrity of the data given. Geotagging technology would offer a more accurate and trustworthy means to verify the addresses of GST-registered companies.
- To strengthen the GST registration process, the Central Board of Indirect Taxes and Customs (CBIC) is exploring geotagging technology for verification purposes.
- This technology will help verify the physical location of an entity's office, thereby preventing instances where fake office spaces are created solely for verification purposes.
- The board is also considering the implementation of biometric authentication for suspicious or risky registrations.
The CBIC initiated a pilot project for geotagging addresses in some states
The taxing authorities are attempting to strike a balance between tightening the system to stop bogus Input Tax Credit (ITC) claims and giving taxpayers some space to modify their claims in GSTR-2A.
Geotagging and biometric authentication will provide an extra layer of certainty in verifying an individual's identity.
This authentication method will ensure that the person registering for GST is indeed the rightful holder of the Aadhaar card used for authentication.
With the new norms in place, additional strategies such as data matching, stricter fines for false ITC claims, and an automated verification procedure would assist in tightening the system to prevent false ITC claims and enhance the GST system.
6 Years of GST
According to a survey conducted by a leading tax consulting agency, 94% of the industry, including 88% of #MSMEs (Micro, Small, and Medium Enterprises), have expressed positive sentiment towards the new tax regime.
- The unified GST has replaced over 100 different statutes related to various taxes, streamlining the tax system.
- The number of registered taxpayers has increased from 65 lakhs to 140 lakhs, contributing to the formalisation of the economy.
- The GST system processes over one crore returns and around nine crore e-way bills generated by approximately 23 lakh taxpayers monthly.
- Six lakh large taxpayers upload around ten crore invoices monthly.
The immense volume of data also presents challenges
Unscrupulous elements have taken advantage of the system's seamless flow of credit by engaging in fake credit networks.
- To address this, GST 2.0 is already focusing on designing effective entry barriers to ensure only genuine businesses enter the system and facilitate compliance among entities.
- Policymakers would leverage #AI and #ML tools to identify "risky" applicants at the application stage, perform rigorous verification before granting registration, and implement largely automated systems for taxpayers to respond to queries by tax officials.
- It would help prevent revenue leakage, which is crucial as assured revenue growth to states will soon end, and cess levies will conclude by March 2026.
- Rate rationalisation, correction of inverted duty structure, and addressing issues like online gaming and betting should be considered shortly, taking into account controlled inflation.
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Conclusion
Introducing geotagging and biometric authentication will add an extra layer of security and help weed out bogus registrations. By leveraging technology and implementing automated systems, the compliance process can become more efficient and less prone to manipulation.
vitwo.ai ai believes implementing these reforms and maintaining a focus on efficiency and neutrality - the GST system will continue to evolve and benefit both the government and taxpayers.