A panel of officials attached to the federal tax body, the Goods and Services Tax (GST) Council, has proposed overhauling the GST registration process and suspending the registration of businesses identified as ‘risky.’
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The proposals by the law committee of the GST Council, a team of central and state officials advising its ministerial members, aim at tightening of compliance measures and to target restrictions on select firms identified as risky without affecting the ease of doing business in general, said a finance ministry official.
The recommendations include the use of Aadhaar or Aadhaar like biometric identification for new registrations, steps to identify businesses that pose the risk of revenue loss to the exchequer, use of income tax return to verify credentials of the entrepreneur seeking GST registration, and restriction on using tax credits from the purchase of raw materials to meet the final tax liability.
Also, non-filing of GST returns for six months could cost a business its GST registration. At the moment there are six lakh dormant GST-registered firms among the 1.2 crore entities with GST registration.
Also, GST registration seekers would be profiled based on their credentials and classified into ‘trustworthy’ and the others. Trustworthy entrepreneurs are those who have a credible income tax payment history and have their identity authenticated by Aadhaar and have no history of having GST registration canceled.
They will get GST registration within a week, while the others will be given within two months after physical verification of business premises, said the official. Those that are not trustworthy may also be asked to pay a part of their tax liability in cash instead of adjusting it fully against the tax credit available to
The proposals put together by the law committee at a meeting last week will be further discussed before placing before the Council, the official said, requesting anonymity.
The move signals a major tightening of the three-year-old indirect tax system leveraging GST’s ability to track the entire supply chain using the system of input tax credits. As GST return filing system becomes more automated with the use of e-invoices and auto-filled tax returns, discrepancies in compliance will get flagged in the system.
GST authorities have been on a nation-wide compliance enforcement drive this month which led to busting a fake invoice racket. That has led to the arrest of 48 persons and three Chartered Accountants and 648 cases registered so far.
Mean-while, The total confirmed case count in India has now crossed 9.1 million. On Sunday, India reported 44,404 fresh Covid-19 cases, taking its tally to 9,140,312. The country’s death toll has mounted to 133,773. At 1,780,208, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 873,046, Andhra Pradesh 862,000, Tamil Nadu 769,000, and Kerala 562,735. Delhi recorded 6,746 fresh Covid-19 cases on Sunday and a positivity rate of 12.29 percent while 121 more fatalities pushed the death toll to 8,391, authorities said. The total number of cases has climbed to 529,863.
The global tally of coronavirus cases stands at 58,970,525. While 40,759,532 have recovered, 1,393,227 have died so far. The US, the worst-hit country, has 12,588,661 cases, and 262,696 have died from the disease there. It is followed by India, which has 9,140,312 cases, Brazil (6,071,401), France (2,140,208), Russia (2,089,329).