The law committee of the GST Council is a constitution of central and state officials, which forms guidelines for the ministerial members, leading the objective of creating a common market with a uniform tax by eliminating the cascading effect on taxes.
The proposals by the law committee of the GST Council, comprising central and state officials who advise its ministerial members, aim to tighten compliance measures and target restrictions on firms identified as risky
In the lieu of issuing new rules for signing up of GST, Finance Ministry official clearly stated that the aim of tightening compliance measures and targeting restriction on firms which were identified as risky will not affect the ease of businesses in general.
Examination of GST registration process and suspension of the registration of businesses (identified as risky) are among the proposals of a panel of officials. The use of Aadhaar or Aadhaar-like biometric identification for new registrations preposterous the steps of identifying businesses that pose a risk of revenue, loss to the exchequer where income tax returns can be used to verify the credentials of entrepreneurs seeking GST registration , restriction can be imposed using tax credits for the purchase of raw materials to meet the final tax liability.
Entities seeking GST registration would be sketched on the basis of their credentials of trustworthy entrepreneurs inclusive of the one having a credible income tax history payment, having an identity authenticated by Aadhaar and doesn’t have any history of the GST registration cancellation and only then it will be indexed under trustworthy or any other fixed bifurcations, but those who are not trustworthy is asked to pay a part of their tax liability in cash rather than adjusting it against the tax credit available to them.
The ministry official also stated that the above expressed entrepreneurs will get GST registration within a week; meanwhile it will take 2 months of physical verifications on the business premises for the registration of one who is listed under not trustworthy. Not filing GST returns for six months could also cost a business its registration in return.
The move signals a major tightening of the three-year-old indirect tax system leveraging GST’s ability to track the entire supply chain with the support of the system of input tax credits. The variation in filing GST returns will be pointed out and will be made more effective with the use of e-invoices and auto-filled tax returns. As per the officials, the proposals put together by the law panel at a meeting held last week will be further discussed as soon as they are placed before the council.
Cofounder and chief executive officer of Avantis Regtech Pvt. Ltd, Rishi Agrawal believes that sooner than later, India Inc. is asked to focus on error -free and well-timed compliance. Ignorance of the law will not be entertained as an excuse for non-compliance. The government is supposed to be armed better so as to enhance the digital capabilities of automatically detecting evasion, leakages, defaults and delays.
At present, there are approximately 600,000 dormant GST-registered firms along with 12 million entities with registration. GST authorities are ensuring the compliance of laws within the country which resulted in the bust of an invoice racket where around 48 people were arrested along with three chartered accountants. Approximately, 648 cases have been registered so far this month.
