The Income Tax Department wants to mine the GST payments data of businesses to ensure that no income goes untaxed.
The Central Board of Direct Taxes (CBDT) wants firms availing presumptive taxation facility and also certain companies (not subjected to tax audit) to furnish GST-related payments information in their income tax returns. This has been specified in the new set of income tax return forms notified by the CBDT for Assessment Year 2018-19.
Tax experts see the move as an effort to reconcile transactions reported for GST and for income tax purposes. Businesses have in the past been known to provide different turnover data for sales tax assessments and income tax retuns.
Finance Minister Arun Jaitley had recently said the GST process would contribute to more direct tax collections: as more businesses get ‘formalised’ due to GST, income tax collections, too, will increase.
That’s already happening: direct taxes collections are on course to exceed the revised estimate of ₹10.05 lakh crore.
Aseem Chawla, Partner, Phoenix Legal, a law firm, said the CBDT move suggests that the tax department wants to collect all relevant information to check tax evasion.
Naveen Wadhwa, DGM, Taxmann.com, said the data on GST transactions would help the department reconcile transactions reported in the returns.
M.S.Mani, Partner, Deloitte India, said, “The information… could also be potentially used to determine if income tax payments are in line.” Since the GST identifier is a PAN-based number, it would be difficult for businesses to report separate sets of data, Mani told BusinessLine.
Only companies that are not subjected to tax audits are required to furnish GST details for now. But this requirement may be extended to tax audit cases when the CBDT comes out with the new format of Form 3CD (form for tax audit), sources said.
Wadhwa said there are more than 25 key changes in this year’s ITR forms; these changes suggest the focus is to get more information from unlisted companies, trusts and those who have opted for presumptive taxation.