Synopsis
A group of ministers (GoM) headed by Maharashtra finance minister Ajit Pawar, which is scheduled to give its report on reforms on the GST system to the council, has recommended public disclosure of information of unregistered bogus traders and provision of information on transactions through Point of Sale (POS) by banks, among others.
The Goods and Services Tax (GST) council is likely to take up a proposal for stricter scrutiny and verification of highrisk taxpayers ahead of the next level of reforms in the indirect tax framework that completes five years of roll-out on July One.
A group of ministers (GoM) headed by Maharashtra finance minister Ajit Pawar, which is scheduled to give its report on reforms on the GST system to the council, has recommended public disclosure of information of unregistered traders and provision of information on transactions through Point of Sale (POS) by banks, among others.
The council meeting this week on June 28-29 in Chandigarh is expected to focus on ways to improve revenue collection and plug leakages as compensation to the states ends this month.
Last year the council had set up a GoM under Pawar to review IT tools and interface available to tax officers and suggest measures to make the system more effective and efficient, including changes in business processes. It was also asked to identify potential sources of evasion to plug revenue leakages.
MINIMAL RATE REJIG
The council is expected to refrain from undertaking any significant increase in tax rates as part of rationalisation in view of inflationary concerns. "No major rate rejig is expected apart from some tweaks and clarifications. However, there will be a detailed discussion on improving the GST system, use of technology and better cohesion between the centre and stateto plug in leakages," an official said.
The GoM recommended verification of physical addresses of high-risk taxpayers to prevent input tax credit fraud. It has also suggested making mention of electricity consumer registration number mandatory at the time of GSTN registration, certification of taxpayers’ bank accounts by National Payments Corporation of India (NPCI) and establishment of a feedback mechanism to detect suspicious transactions.
It has also made out a case for measures to prevent harassment from tax officials and improvement in process to claim input tax credit.
It has also made out a case for measures to prevent harassment from tax officials and improvement in process to claim input tax credit.
MINIMAL RATE REJIG
The council is expected to refrain from undertaking any significant increase in tax rates as part of rationalisation in view of inflationary concerns. "No major rate rejig is expected apart from some tweaks and clarifications. However, there will be a detailed discussion on improving the GST system, use of technology and better cohesion between the centre and stateto plug in leakages," an official said.
The fitment committee under the council has recommended status quo on tax rates for 215 goods and services.
The council is also expected to take up an interim report from the GoM on rate rationalisation, headed by Karnataka Chief Minister Basavraj Bommai, on pruning of exemptions under GST.
Exemptions such as for hotel rooms less than Rs 1,000 per night and non-branded food items could be taken up. Extension of this GoM by another six months to investigate a comprehensive rate rationalisation is also expected to be taken up by the council.
The council is expected to take final call on rates on casinos, horse racing and online gaming after the ministerial panel headed by Meghalaya Chief Minister Conrad Sangma suggested imposition of 28% GST on these activities.
The council is also expected to take up the GST on cryptocurrency. The Central Board of Indirect Taxes and Customs has favoured imposition of 28% on cryptocurrency transactions.
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