sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

Small businessmen wary of retro tax demand under GST mechanism
September, 01st 2016

The Goods and Services Tax (GST) has been heralded as India's biggest reform since the 1991 liberalisation but one aspect of it has made certain small businesses nervous.

Given that it will be virtually impossible to escape the tax net once the new levy is implemented, will this make them fair game for authorities investigating evasion in previous years? That fear is pushing many to make use of the government's black money window that closes at the end of the month. Prime Minister Narendra Modi, in fact, pointed to abuse of the current system in his Lok Sabha speech on GST.

"We all know how the system of kacha bill and pakka (fake and real) bills operate. But GST will bring an end to the fake bills as traders will provide the real bills and accounts so that they benefit (in getting input tax credit)," Modi had said on August 8. All businesses — manufacturers, distributors, retailers — will have to register on the GST network.

The levy is expected to be in place next year. Once captured in the GST system, tax officials can make an educated guess about income and evasion over the past years. "GST will not only impact the indirect tax collection but also the income tax collections as this is one tool where the tax officials will have a data to calculate incomes of people, against the income taxes paid by them," said the tax head at consultancy.

Small businessmen wary of retro tax demand under GST mechanism
At a meeting of retailers in Mumbai in August, many were asking experts whether the government would target them for taxes not paid in the past. Some have been prompted to disclose assets under the income declaration scheme (IDS) and more may do so before the window closes on September 30. Apart from avoiding bills altogether, under invoicing and over invoicing are also typically used to escape taxes.

"There were basically two types of fraud committed by businessmen — first is unilateral, where under invoicing or over invoicing is done only by one of the two people transacting. And then there is bilateral," said Bharat Goenka, managing director of Tally Solutions Pvt. Ltd, which is developing GST software for Indian companies.

Some experts said while unilateral frauds would drop drastically, bilateral ones may be difficult to detect. Tax firms are advising at-risk businessmen to disclose black money under IDS. "Businessmen who may not have paid taxes won't be able to continue business if they aren't registered on GSTN, but doing so may expose them," said one consultant.

"It's a vicious circle, and many want to come clean," said another. Some say there is concern among retailers but more about systems rather than retroactive crackdowns. "Firstly, everyone wants to comply with the tax rules, but many are worried about the cobweb of complicated processes," said Praveen Khandelwal, secretary general, Confederation of All India Traders.

"Once GST comes in, I do not think anyone can be targeted retrospectively for not paying VAT, excise or other taxes, and these would be repealed." The tax head of a New Delhi-based consultancy said it will be possible to check on the past record.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions