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Happy GST tidings, pursue audit trails - GST Station

Happy GST tidings, pursue audit trails

Happy GST tidings, pursue audit trails

    A rebound in the goods and services tax revenues in October in the run-up to the festive season is encouraging. Collections grew 6.6% in October compared to September this year to cross Rs 1 lakh crore for the second time in 2018-19. A sustained rise on the back of more stability in the tax system will help yield a bounty in the medium term. Data thrown up by GST, which creates audit trails across the production and income chain, must be used to widen the direct tax base. This calls for big data analytics to mine information and track the source of funds. This is eminently doable with India among the top 10 big data analytics markets in the world. The more the mining of data, and the better the algorithms, the easier would be the ability to tap into the unified base of tax potential.

    Share of direct taxes in total tax revenues must rise, as indirect tax collections hurt rich and poor alike. For the economy as a whole, gross value added is equal to gross profits plus wages and salaries. The same applies at the firm level. This insight can be used to estimate the value added by each production unit, and its distribution to taxable entities. Electricity bills and employee provident fund payouts must tally with the claimed production and value added levels. These deserve to be pursued, rather than tax-abiding companies in the name of anti-profiteering.

    But a comprehensive GST requires widening the base to include sectors such as petroleum and real estate. Electricity duties, too, must be subsumed in GST to raise transparency in the sector and bring down power costs. Lowering the rate of tax, especially on products that attract the highest 28% rate, easing compliance and taking tough action against evaders will shore up collections.

    Source- Economic Times.