Evolution of GST - Curbing Tax Evasion
Evolution of GST - Curbing Tax Evasion
In this ripple, we shall discuss about the proposed initiative of generation of e-invoicing for larger companies, validation of e-way bills (electronic permits issued for the movement of goods) with the data generated at toll plazas and geo-tagging of companies.
The newly elected Finance Minister Nirmala Sitharaman, is set to chair her first ever meeting of the Federal Indirect tax body (GST Council) on the 21st of June, 2019. The body is set out to take several steps, with the ultimate goal of curbing or eliminating tax evasion.
The government's approach is to increase scrutiny on businesses in an atmosphere of lower than expected GST collections, after handholding them through the first two years of the tax reform.
The 35th Meeting of the GST council will seek to introduce compliance requirements in a phased manner, initially applicable to large businesses, and then eventually applicable to all taxpayers, with the aim to curb tax evasion and leakage.
The various proposals which are to be discussed before the council include:
- Compulsory generation of e-invoicing by large companies,
- Validation of e-way bills with the data generated at toll plazas and geo-tagging of companies.
Generation of e-invoices will improve transparency of transactions and act as an extra layer of regulatory oversight on transactions of large companies.
