GST data may be used to track income-tax evaders
07/12/2017
MUMBAI: The government may be looking to use data obtained from Goods and Services Tax (GST) filings to track those who are escaping income-tax, two people close to the development said.
The government is setting up a mechanism wherein data obtained through GST reporting could be correlated with the income-tax filings.
While the project is still in the initial stage, the government wants to create a database whereby income of companies and their promoters could be matched with that of the tax returns filed, said a person in the know.
It is still unclear whether the government would use this data to dig out tax evasions in the earlier years or whether this will only be for prospective tax scrutiny. Unlike the earlier tax regime, GST leaves a trail, especially for the business of size, and it becomes hard to underreport income or exaggerate expenses. Industry trackers said tax officers don't have to go through the sea of data to make sense as big data analytics could do the same for them and throw results or raise red flags. "Technically, it is possible to use GST data to draw linkage with the income-tax data through the common data set with the help of analytics. Currently, the GSTN and tax department already have the data to carry out the risk analysis where outliers in terms of the industry average of tax payments is scrutinised and those not paying or under-reporting company revenues could be questioned," said Jaskiran Bhatia, partner, tax technology and analytics, Deloitte India. Take the example of a unit manufacturing a specialised chemical used in the pharmaceutical industry. The promoters of the company have a turnover of about Rs 30 crore annually for the past few years, but they were paying corporate tax only on about Rs 4 crore.
Not just that, the promoters have been underreporting their own income and escaping income-tax.
Share This Story |
|
Comment On This Story |
|
|
|
|