Good Augury of High GST Collections – The Economic Times

Clipped from: https://economictimes.indiatimes.com/opinion/et-editorial/good-augury-of-high-gst-collections/articleshow/84983593.cmsSynopsis

GST revenues for June, collected in July, stood at ₹1,16,393 crore, 25% higher than the preceding month. The rise came both from domestic transactions and imports: economic recovery pushed up imports, leading to an increase in collections from Integrated GST.

The spurt in the goods and services tax (GST) collections in July reflects economic recovery after most states eased Covid restrictions. This is welcome. There is room to make GST revenues more buoyant through greater formalisation of the economy and widening of the tax base, underscoring the need to deploy data analytics in a big way to track income escaping tax. GST revenues for June, collected in July, stood at ₹1,16,393 crore, 25% higher than the preceding month. The rise came both from domestic transactions and imports: economic recovery pushed up imports, leading to an increase in collections from Integrated GST. Tax authorities must also assiduously pursue audit trails in the income and production to boost collections.

Reportedly, an investigation based on the results of advanced data analytics has uncovered discrepancies in income-tax and indirect tax filings of many companies and individuals. The ability to organise data collected from multiple sources and correlate them to uncover patterns of undeclared incomes is at the centre of this drive. At work are the infrastructure of data centres, databases, networks and software with analytics and artificial intelligence tools. The better the algorithms, the simpler would be the ability to tap into the unified base of tax potential.

The acceleration of digital payments following economic recovery has helped formalisation and tax compliance of large swathes of the economy. The Unified Payments Interface logged 3 billion transactions (processing business worth ₹6 trillion) in June, and a faster adoption of digital payments will help boost tax revenues. Lowering the GST rates and bringing all indirect taxes, including electricity duty and petrofuels, under GST should not be delayed.

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