NEW DELHI: Taking a grim view of the less-than-expected tax collection under the composition scheme, the government has decided to set up a separate team to look into tax evasion by small traders, sources told Express.
“The collection (Rs 307 crore) is below expectation and the government suspects under-declaration by traders to evade tax,” a senior finance ministry official told Express. According to the official, the collection was 30 per cent lower than what the government had expected. He added that a mix of technology and intelligence inputs will be used to trace discrepancies in transaction and declaration. “The government will act against those who have not rightly declared their turnover.”
The GST Council had on Thursday discussed moving to a new system in which filling must be accompanied by uploading of invoices by sellers or suppliers, which would work as a deterrent against evasion.
“I am sure revenue will pick up with the anti-evasion measures we are putting in place. So far, the figures you have seen are on voluntary compliance without any anti-evasion measures,” finance minister Arun Jaitley had said.
The FM added that online availability of data has opened corporate activities to public gaze and make it easy to detect any impropriety.
“There is pressure on everyone to make sure that compliance does take place. If there is any impropriety, the possibility of it being detected is going to be high,” warned Jaitley.
The government had introduced the composition scheme to reduce the compliance cost for small taxpayers with income up to Rs 1.5 crore.
Earlier this month, the government had notified lower GST rates for the composition scheme. The notification stipulated that manufacturers who have opted for composition scheme would now have to pay 1 per cent GST against 2 per cent earlier. There were about 17 lakh traders registered under the composite scheme.