The GST collection of ₹1-lakh crore plus for six successive months cannot be a coincidence, Tarun Bajaj, Secretary, Economic Affairs and Revenue, has said. In an interview to BusinessLine , Bajaj said simplification and better compliance have led to better collection. He also expressed hope that gross direct tax collection shortfall is likely to be just 3 per cent at the end of FY21 and that the overall tax collection for FY22 would be better than what is mentioned in the Budget Estimate. Excerpts :
With the fiscal year ending, what is the overall direct tax collection status?
The overall tax collection is better than the RE (Revised Estimate). This estimate was announced on February 1 and we were optimistic that the collection would be better in February and March. At the same time, our effort was to push the refund within the year itself, contrary to the earlier situation when this used to be pushed in later months.
Refund has already surged to more than ₹2.5-lakh crore as against ₹1.86-lakh crore during FY20. Our effort has been to settle more and more refunds. As the figures are still coming in, the overall net direct tax collection will not be less than ₹9.5-lakh crore. At the same time, higher refunds will act as a stimulus as the taxpayers got their money back in the same fiscal, which was not happening earlier. Our revenue situation is better than expected. Despite the impact of Covid, the shortfall in gross direct tax collection would not be more than 3 per cent comapred to last fiscal.
How do you see the surge in GST collection?
First, you need to keep in mind simplification in the procedures — we asked small taxpayers to file returns once in three months but pay tax on a monthly basis. Second, the system started generating invoice reference numbers (IRNs) based on invoices in case the annual turnover is ₹100 crore, which has now been lowered to ₹50 crore annual turnover since April 1. These invoices are auto-populated in GSTR1 which, in turn, auto-populates GSTR-3B. All these have been made possible with technology. Then, the tax department focussed on those using maximum input tax credit to settle tax liability; we asked them to pay at least 1 per cent in cash. All these efforts were taken to ensure people paid taxes.
At the same time, the system has facilitated honest assessees to pay taxes without any problem. Now, GST collection has been ₹1-lakh crore plus for six consecutive months; this cannot be a coincidence.
It is being said that more collection is on account of increasing compliance rather than actual increase in production of goods or better performance of services. What do you have to say?
You need to understand that if you are working in a system and tax liability has been generated, you will have to pay the tax. It is not like income tax, where one has not paid the advance tax or not filed the return.
Under GST, if you have supplied goods, e-invoice is generated, ITC is considered and, accordingly, cash liability would be generated. Then, you have to pay tax. No doubt, compliance is there, but we are making it easy for assessees to pay taxes.
Now, the number of complaints has reduced significantly. In total, on the one hand, there is greater compliance and, on the other, the economy is picking up, contributing to higher collection.
Is there a fear that the second wave of infection will have an impact?
I don’t think so. Yes, there are some concerns, but we don’t have the fear which we had last year because we are not resorting to lockdown to control the infection. It is being done through vaccines. We are confident of handling the situation.
Convention prescribes GST Council to meet at least once in three months, but it has not happened this quarter (January-March)? When can we expect it?
I have been told to organisemeetings at least once in three months. However, given the election in key States, it was not possible to call for a meeting and it won’t be appropriate to take a major decision without consulting these States. Hopefully, the meeting will take place post-election.
What about inclusion of petrol and diesel in GST?
The Finance Minister has already spoken abot this and there is nothing more to add. Let us wait for little while.
What is the progress on faceless scheme?
It is doing well. Out of the first lot of more than 58,000 legacy cases, the CBDT has issued final scrutiny assessment orders in over 45,000 cases through the faceless system, while out of 1.36 lakh new cases, 55,000 have been completed and final scrutiny assessment orders have been issued. In more than 94 per cent of the cases, the explanation of the taxpayer was accepted and no additional tax or penalty was imposed. Only in about 1,600 cases, concealment or understatement of income was established and addition of income has been made.
What is the progress in Vivad se Viswas scheme?
In order to provide more time to the taxpayers who are desirous of settling disputes under Vivad se Vishwas, the government has extended the date for making payment without additional amount to April 30, 2021, and for filing of declaration to March 31, 2021.
The latest data (as on March 31, 2021 up to 5 pm) show there were more than 1.33 lakh applications involving ₹99,960 crore.