Centre and States Collaborate to Expand GST Base
NEW DELHI: The Indian government is taking steps to enhance the Goods and Services Tax (GST) framework by leveraging data analytics to broaden the taxpayer base. Following the recent GST Council meeting, officials indicated that changes in the return filing system and invoice matching are expected to reduce revenue leakages. Currently, there are 1.7 crore registered taxpayers, and the government believes this number can be increased.
Officials stated that discussions have focused on improving the quality of disclosures and utilizing technology to expand the taxpayer base without being intrusive. The GST Network, which manages backend data, will collaborate with states to identify gaps. Additionally, the Centre and states are promoting e-invoicing, set to be ready by April, with incentives for businesses to adopt the new system rather than imposing mandates. This initiative aims to provide comprehensive data on all entities within the supply chain.
Changes finalized by the GST Council are anticipated to be implemented in April, pending necessary amendments to existing laws. The finance ministry is also considering whether to halt the issuance of notices for demands under Rs 10,000 through an executive order. In the coming weeks, officials will convene to determine the approach to tax credits, discussing whether to stop credits for the entire supply chain or target only the non-compliant entities. Some states have expressed concerns that blocking credits could lead to harassment of businesses, while others have raised issues regarding input tax credits on automobiles.
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