Officials are not too worried about those under the non-composition scheme as the input tax credit facility and the matching of invoices in the chain of transactions at various levels are two significant measures that make evasion detectable eventually. The ITC feature brings in self-policing mechanism.
Mr. Somesh Kumar is confident that direct taxation will also gain because of GST as it will not be easy any more for traders and dealers to evade tax on their income. The 10 digit Aadhaar is part of the 15 digit GSTN . This will make it possible for one to keep a tab on high-value purchases and investments even if one under reports his income. “The Income Tax Department will bank on our GST data if they see something amiss,” he says.
Another significant measure that will make it difficult for tax evasion is online audit of tax returns. Mr. Somesh Kumar, who had introduced it, said it is to bring in transparency and do away the discretion of officials.
“There was no transparency in the audit of tax returns earlier and now no audit can happen outside the system and the discretion of officials has come down as the audit will also be reviewed by peers,” he said.
