The Government may take a lenient approach on the taxpayers under the GST towards the businesses till the Loksabha elections.
The authorities will, however, continue to collect data on transactions from various sources, which will be useful once enforcement measures are scaled up, reports said.
The pause on anti-evasion measures till early July will help the government in several ways, especially to avoid unsettling the business and trading community before the crucial national polls due in April-May, a government official said.
Besides, tax authorities will also have the annual returns, as well as audit report, for the first year (2017-18) of the tax reform by July. India would also have completed the two-year transition period of the largest tax reform since Independence.
“After the elections, enforcement will be stepped up. Now a long rope has been given. All data about registered businesses, the volume of transactions and those who do not file returns are captured by GST Network (the company that processes tax returns),” he added.
A scale-up of anti-evasion measures is crucial for the Union government to achieve the over 18% rise in total GST collection projected for FY20 at ₹7.6 trillion. The government lowered its projection for FY19 by a massive Rs. 1 trillion to Rs. 6.4 trillion in the interim budget.
Another senior official, who also spoke on the condition of anonymity, sounded more cautious about tax evasion measures. “We no longer speak in terms of ‘enforcement’. We speak about encouraging compliance. We have reduced tax rates. That itself will increase compliance. Besides, we have the data available about non-filers.” He added that central and state governments will take steps to increase compliance.
According to sources, all businesses should be registered, but the process may have led to some pain. Also, small traders, who were not used to filing returns, had developed a mental block. “Besides, revenue receipts from small businesses are not significant. There has to be a balance in achieving the optimum tax base and in ensuring that compliance does not become too rigorous. Raising the turnover threshold for registration was the best possible way to do that.”
