India has deployed business intelligence or ‘third eye’ technology in its Goods and Service Tax Network to detect defaulters and will install radio frequency identification tags on trucks transporting goods to check on compliance in the e-way bill process, Sushil Kumar Modi, who heads the GSTN panel, said on Saturday.
“There is minimum manual interference now when there is a requirement to file returns as everything regarding payments is online,” Mr. Modi told correspondents in Bengaluru. “We have business intelligence in our network. You cannot dupe the government department.
‘Discrepancies stand out’
“In the third phase of IT development, we have sent to States the GSTR 3 and GSTR 1 forms. They both have to match. If there is a discrepancy then the third eye will detect. Notices will be served.”
Mr. Modi, who is also the Deputy Chief Minister of Bihar, said the “business intelligence” within the network can generate more than 15 kinds of different registrations. “Business intelligence can give a 360-degree view of the taxpayer.”
“States can take action against the defaulters. The system, through bid data analysis, will send an alert to those who purchase goods from traders who have not paid the tax as ‘non-filer’,” he said. “The government has started serving notices to defaulters since April.”
The government is also planning to install sensors at entry and exit points of each State’s borders and deploy RFID (Radio Frequency Identification) tags on trucks to monitor e-way bills.
“Currently it is implemented in Maharashtra and Uttar Pradesh. We will introduce it nationwide,” he said.
The government is also mulling simplification of tax return forms, he said. The GST Council has approved a new procedure to simplify the returns and the law committee will seek the approval of GST Council to implement the changes during the forthcoming meeting on July 21.
Infosys, India’s second-largest software exporter, is developing the information technology infrastructure to implement the new changes.
“In GSTR-3 one needs to file 37 returns in a year,” Mr. Modi said.
“Now we are practically reducing it to only one page or maybe two pages. For business to consumer companies, it will be a three-line return form. It will be the simplest return form India has ever had.”
The Law Advisory Committee set up by the Ministry of Finance has suggested increasing the threshold of the composition scheme to ₹1.5 crore from the current ₹1 crore, he said.
“The GST Council will take a call on when to amend.”
“It has also recommended a special class of dealers for the reverse charge mechanism, For service providers, the norm suggested is between 10% (of turnover) or ₹5 lakh whichever is lower.”
Another suggestion of the committee was that if restaurants, travel firms, healthcare companies and beverage outlets provide transport for women in the night shifts, they can avail of input tax credit, he said.
The funds left in the compensation cess, which is used to compensate the States for revenue shortfall suffered due to the GST roll-out and amounts to ₹22,000 crore as of March, will be distributed among the Centre and State governments, he said.
“Under the IGST there is about ₹22,000 crore in the kitty,” Mr. Modi said. The Integrated Goods and Tax (IGST) is charged on goods that get transported between States.