Tribune News Service
New Delhi, July 30
The Comptroller and Auditor General of India (CAG) has observed that the government fell short in rolling out a simplified goods and services tax (GST).
“The complexity of return mechanism and the technical glitches resulted in the rollback of invoice-matching, rendering the system prone to frauds. Thus, on the whole, the envisaged GST tax compliance system is non-functional,” the CAG observed in a report tabled in Parliament today.
The Modi government had launched the GST regime exactly two years back in order to reduce the then cumbersome system of cascading taxes and eliminate inter-state barriers.
Dwelling on the “simplified tax compliance regime”, the CAG said this is “one significant area where the full potential of GST rollout has not been achieved”.
It said even after two years of rollout, a system-validated input tax credit through an invoice matching framework, has not been implemented. Invoice matching system is used to match invoices issued by taxpayers and their returns to check evasion. The complexity of the return filing mechanism and technical glitches resulted in the rollback of invoice matching, making the GST regime cumbersome.
As a result, returns being filed showed a declining trend of filing from April to December 2018. The filing percentage of GSTR-1 returns (monthly returns on outward supplies) was less in comparison to the corresponding filing of GSTR-3B returns (summary self-assessed return).
The CAG said GSTR-3B led to filing of returns with ITC claims which authorities could not validate and led to discouragement in the filing of GSTR-1 as well. “Since the filing of GSTR-1 is mandatory, short-filing is an area of concern and needs to be addressed,” it observed.
Highlights shortcomings
- GSTR-3B led to filing of returns with input tax credit claims which authorities could not validate and led to discouragement in the filing of GSTR-1 as well
- System validations not aligned to the provisions of the GST Act, leading to crucial gaps in the registration module such as failing to debar ineligible taxpayers from availing the Composition Levy Scheme
from The Tribune https://ift.tt/2Mr1cMB
via Today’s News Headlines
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