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AI, data analytics to track GST evaders, boost compliance

January 3, 2020 admin Comments 0 Comment

The government plans to increase the use of artificial intelligence and data analytics to track down tax evaders, and improve compliance with the Goods and Service Tax in order to augment revenue.

Top tax officials are scheduled to participate in a brainstorming session to be chaired by revenue secretary Ajay Bhushan Pandey next week to firm up this plan.

“The revenue secretary will hold a day-long meeting on January 7 with tax commissioners to discuss ways to streamline the GST system and plug leakages due to fraud,” said a person aware of the development.

The discussions will include assessing the wider use of data analytics and AI in the process of enforcement and red-flagging tax evaders and fake refund claimants without overreach or harassment to genuine taxpayers.

The meeting comes on the heels of the government notifying changes to GST rules to prevent frauds and fake invoicing, besides setting up grievance cells to ensure that genuine taxpayers are not harassed and the overall tax base increases. The government last week reduced input tax credit to 10% from 20% of eligible credit if invoices or debit notes were not reflected in filings.

Last month, the Central Board of Indirect Taxes and Customs instructed field officers to expeditiously create GST grievance redressal committees at zonal and state levels.

Tax officials have been directed to identify cases of suppression of personal income, wilful tax evasion, fake invoicing or inflated or fake e-way bills, and take stern action.

Those attending the session will include state tax commissioners and chief tax commissioners from the Centre, senior officials of various tax bodies along with officers of the enforcement wings. Their goal is to develop a targeted approach to stop tax and duty evasion while making sure that no taxpayer is troubled.

There’s growing concern over revenue shortfall, with slowing consumption demand adversely impacting GST collections. The corporate tax cut amounting to a loss of revenue of Rs 1.45 lakh crore, along with recent GST compensation of over Rs 35,000 crore to states, have increased the stress on the Centre’s fiscal position.

Source: Economic-Times.

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GST evaders beware: Risky taxpayers to be profiled to pre-empt dodging

July 30, 2019 admin Comments 0 Comment

In a bid to pre-empt tax evasion under the Goods and Services Tax (GST), the government is looking at options to deal with taxpayers based on their risk profile. Assessees identified as ‘risky’ could face restrictions on issuing invoices, utilisation of input tax credit and sanctioning of refunds.

The government has been grappling with evasion through fake invoice since the GST was launched two years ago. The indirect tax department has detected such frauds worth over Rs 12,000 crore. A tax official said the rule of the thumb indicated that detected frauds were only about 10% in value of actual frauds being committed, which would take actual evasion to nearly Rs 1.2 lakh crore.

The GST Council, which is the apex decision-making body for the GST, has constituted a committee of officers (CoO) to suggest parameters for risk-based profiling so that a taxpayer could be categorised as risky in an automated manner. Further, the CoO will identify methods for assessing financial credibility of a taxpayer vis-a-vis its GST profile. The committee will submit a report to the GST Council on August 15.

According to the terms of reference (ToR) for the committee, it will also suggest changes in GST law and rules to enable profiling and regulating risky taxpayers, including invocation of penal provisions in case of failure to undertake desired know your customer (KYC) verification. Further, the panel is required to suggest “measures for implementation of suggested risk-based management on immediate basis and any other measures, mechanism and machinery to check and curb multiple type of frauds,” the ToR said.

The official quoted above said recovery of tax evasion after it has happened was onerous and doesn’t yield results as often fly-by-night operators are not found at their addresses. It was important, he added, that pre-emptive mechanisms were employed to detect the likely instance of frauds before they took place.

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Source: Financial-Express

Businesses can apply for revoking cancellation of GST registration by July 22: CBIC

April 26, 2019 admin Comments 1 comment

The revenue department has allowed businesses whose GST registration has been cancelled due to non-filing of tax returns to apply for its revocation by July 22, provided they file their pending returns and pay due taxes.

In a letter to field offices, the Central Board of Indirect Taxes and Customs (CBIC) said it is providing a “one-time opportunity” to apply for revocation of cancellation of GST registration by July 22, 2019, for the those entities for whom cancellation order has been passed up to March 31, 2019.

The CBIC said where the registration has been cancelled with effect from the date of the order, all returns due till the date of such cancellation are required to be furnished before the revocation application is filed.

In cases where the registration has been canceled with retrospective effect, the CBIC has allowed filing of revocation application, subject to the condition that all returns relating to the period from the effective date of cancellation till the date of revocation order will be filed within a period of 30 days from the date of the revocation order.

The CBIC officers have recently canceled a large number of registrations on account of non-compliance, including non-filing of returns.

Earlier this month, the CBIC had asked its field officers to be cautious while processing an application for fresh GST registration by those businesses whose earlier registration has been cancelled due to non-compliance, as it sought to crack down on tax evaders.

The CBIC missive came after taxmen noticed that businesses whose registration has been cancelled continue to operate without any registration and are not applying for revocation and are instead applying for fresh registration, so as to evade taxes which were due under earlier registration.

About 1.2 crore businesses are registered under Goods and Services Tax (GST), which was rolled out on July 1, 2017.

AMRG & Associates partner Rajat Mohan said: “Numerous MSME sector taxpayers are expected to take benefit of this opportunity who unknowingly stepped on the wrong side of tax laws and were served with punitive cancellation orders”.