Amaravati: Officials told to increase tax base, identify evasion says Dr Rajat Bhargava

Amaravati: Special Chief Secretary (Revenue) Dr Rajat Bhargava addressing a review meeting with the Chief Commissioner of Tax Ravi Shankar Narayan Sudagani and senior officers of the Commercial Taxes Department here on Monday, briefed them on the issues to be raised in the forthcoming 45th GST Council meeting to be held in Lucknow on September 17.

The Special Chief Secretary while pointing out that there is shortfall to the budgeted revenues on account of pandemic, stressed the need to raise the issue of disbursing the compensation due to AP expeditiously and also extension of the period of compensation. He directed the Chief Commissioner to work out the modalities on these two issues on compensation.

He asked the officials to study the sectors like footwear, textiles and fertilisers where there is inverted duty structure (the tax rate on output is less than the tax rates on inputs) resulting in huge refunds of the tax remitted to the exchequer on inputs, posing a twin problem of losing revenue and also the administrative burden of processing refunds.

The inverted duty structure (IDS) also blocks the input tax credit for the taxpayers until the excess of it is refunded to them. Such blocking of input tax credit ultimately results in blocking the working capital of the taxpayers.

The Special Chief Secretary while informing the instructions of the Chief Minister for a multipronged approach, he directed them to include increasing the taxpayer base and also increasing the tax base by identifying the tax evasion/avoidance methods adopted by the taxpayers.

With regard to increasing the taxpayer base, he suggested several approaches such as selective street survey, information from other government departments such as Registration and Stamps, Transport and others should be utilised for bringing those taxpayers who are still outside into the tax net while conducting the street survey.

He said that care should be taken that the businessmen are not inconvenienced in any manner. With regard to increasing the tax base by unearthing tax evasion/avoidance, the Special Chief Secretary pointed out that those sectors which were showing negative growth or not showing the expected growth such as telecommunications, automobiles, Palm oil and restaurants should be focused upon for verification.

While verifying these sectors, data from different sources such as online business platforms, from transport department on vehicle registrations, import data from ports should be cross-checked with the declared turnovers in the returns.

He said that data tools should be utilised for identifying tax evasion. The cooperation of the District Collectors may be taken for collecting tax arrears, he added.

He exhorted the officers to focus especially on the revenue augmentation and achieve the targets indicated in the budget estimates keeping in view that revenues collected by the Commercial Taxes Department form bulk of States' own tax revenues.

Any shortfall in achieving the targets by the Commercial Taxes Department will reflect adversely on the State's developmental activities and welfare measures.