GST Collection Target Resets at 10,000Cr By Govt.

GST Collection Target Resets at 10,000Cr By Govt.

Highlights:

  • The Government on Friday has increased the GST collection targets for the month of January and February by Rs.1.15 lakh crore, from the earlier Rs.1.1 lakh crore.
  • No change for the March target, standing at Rs.1.25 lakh crore.
  • The Government targets to collect Rs.10,000 crore, more than what was targeted earlier.
  • GST Authorities will look into fraudulent Input Tax Credit (ITC) claims as found in data analytics review.
  • SMSs and emails will be sent to such fraudulent or excess ITC defaulters, non-filters and those who provide mismatched information in their return or over- invoice or who have been identified through data analytic for tax evasion by duping the system rogue modus operandi.
  • Taxpayers who have taken ITC wrongfully can voluntarily repay the amount equal to inadmissible credit before the verification process begins and needs to bear disciplinary action.
  • Identified targeted taxpayers and fraudulent refund seekers, and over-invoice users will have to go electronic communications, followed by visits from GST field formation that would be required to report on a daily basis. 
  • GST Department will aggressively use the data analytics features of the GSTN system. 
  • The department is looking to increase its collection efforts in the next 2-3 months via advanced tracking measures to keep an eye on GST evaders.

Just a few weeks ahead of the Budget 2020, the Finance Ministry has come out with the latest update on GST collection. The Government on Friday has increased the GST collection targets for the month of January and February by Rs.1.15 lakh crore, from the earlier Rs.1.1 lakh crore. According to sources in the Finance Ministry, the collection aim for the next two months(January and February) is Rs.1.15 lakh crore and for the last month of the financial year (March) is Rs.1.25 lakh crore, with no change for the March target. Well, which simply means the Government targets to collect Rs.10,000 crore, more than what was targeted earlier.

The decision to revise the target was taken at a high-level meeting convened by the Department of Revenue, under the Finance Ministry, specific focus on fraudulent Input Tax Credit (ITC) claims as found in data analytics review of all the refund under inverted duty structure,etc.

Yes, the GST authorities will look into the mismatched supply and purchase invoices, failure of filing returns, and over-invoicing,among other things. Moreover, the concerned authorities would also look at fake or excess refunds availed beyond the permissible limits, plugging tax leakages, fake or huge ITC claims, and data analytics of mismatch in return forms such as GSTR-1, GSTR-2A, and GSTR-3B respectively.   

Disciplinary Actions Against Frauds and Defaulters:

The government sources said that SMSs and emails will be sent to such fraudulent or excess ITC defaulters, non-filters and those who provide mismatched information in their return or over- invoice or who have been identified through data analytic for tax evasion by duping the system rogue modus operandi. Also, taxpayers who have taken ITC wrongfully can voluntarily repay the amount equal to inadmissible credit before the verification process begins and needs to bear punitive action.   

Moreover, such identified targeted taxpayers and fraudulent refund seekers, and over-invoice users will have to go electronic communications, followed by visits from GST field formation. The aim is to make them obey the law and pay due taxes in a timely manner. However, the field formations would be required to report on a daily basis.    

Action Plan:

In addition to this, the GST Department has been given instructions to aggressively use the data analytics features of the GSTN system. The department is looking to increase its collection efforts in the next 2-3 months with the help of advanced tracking measures to keep an eye on GST evaders. Also, the apex body will strategize an action plan and make the field functions more efficient to achieve collection targets without any overreach.  

What’s Good:

However, on the Fiscal Deficit front, the same has already exceeded budget estimation of over Rs.7 lakh crore, giving a big relief to the Finance Minister Nirmala Sitharaman. But due to lower than expected revenue from tax as well as from disinvestment, the deficit is expected to widen further by at least 20 basis points for the existing fiscal year to 3.5% of the GDP.

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