gst: GST advice should focus on improving revenue collection and plugging leaks

The Goods and Services Tax (GST) Board is expected to adopt a proposal for stricter scrutiny and verification of high-risk taxpayers ahead of the next level of indirect tax framework reforms which will complete five years of rollout on 1 July.

A Group of Ministers (GoM) led by Maharashtra Finance Minister Ajit Pawar, who is due to deliver his report on GST system reforms to the council, has recommended public disclosure of information on bogus unregistered traders and the provision of transaction information via Point of Sale (POS) by banks, among others.

The board meeting this week on June 28-29 in Chandigarh is expected to focus on ways to improve revenue collection and plug leaks as state clearing ends this month.

Last year the council had set up a GoM under Pawar to review the IT tools and interface available to tax officers and suggest measures to make the system more effective and efficient, including changes in processes commercial. It was also asked to identify potential sources of evasion to plug revenue leaks.

The GoM has recommended verification of the physical addresses of high-risk taxpayers to prevent input tax credit fraud. He also suggested making it mandatory to mention the electricity consumer registration number at the time of GSTN registration, certification of taxpayers’ bank accounts by the National Payments Corporation of India (NPCI) and putting in place a feedback mechanism to detect suspicious transactions.

He also advocated for measures to prevent harassment of tax officials and improve the input tax credit claim process.


The board should refrain from undertaking any significant tax rate increases as part of the rationalization given inflationary concerns. “No major rate changes are planned other than some adjustments and clarifications. However, there will be a detailed discussion on improving the GST system, the use of technology and better cohesion between the center and the State to seal the leaks,” an official said.

The adjustment committee under the board recommended the status quo on tax rates for 215 goods and services.

The council is also expected to consider an interim GoM report on rate rationalization, led by Karnataka Chief Minister Basavraj Bommai, on the pruning of GST exemptions.

Exemptions such as hotel rooms under Rs 1,000 per night and unbranded food items could be taken. The extension of this GoM for another six months to investigate a full rate rationalization should also be supported by the board.

The council is expected to take the final decision on tariffs for casinos, horse racing and online gambling after the ministerial panel headed by Meghalaya Chief Minister Conrad Sangma suggested imposing a GST of 28 % on these activities.

The council is also expected to pass GST on cryptocurrency. The Central Excise and Customs Board has favored the 28% levy on cryptocurrency transactions.