Revenue Secretary says there will be more checks from January, compliance is a must
Revenue Secretary Tarun Bajaj said the new income tax portal has improved but there is still some way to go. Bajaj added that both direct and indirect taxes are doing well, not just in comparison to last fiscal but also vis-à-vis 2019-20. One of the reasons for this is that the economy has started looking up, so industry and commerce have improved. Pent-up demand is also showing results in terms of tax collection, he said.
In an interview with BusinessLine, Bajaj shared that a more stritcer regime will be in place from January for people not filing GST returns. Excerpts:
What are the factors behind improvement in tax collection?
Both direct and indirect taxes are doing well, not just in comparison with last fiscal, but also vis-à-vis 2019-20. One reason is that the economy has started looking up, so industry and commerce have improved. Besides, people had pent-up demand, which is also showing results in terms of tax collection. But we need to keep our fingers crossed. We have to see the third and fourth quarters because, last year, these two quarters were very good. So, we have to look at the comparative numbers for these two quarters.
Another reason is that it is not just corporate tax which has gone up. So, an important point is that personal income tax, compared to last year and the year before, has gone up. It is not just that companies are doing well, a lot of credit must also go to the Department as it is more focussed towards revenue; they are looking at leakages.
A lot of money has started coming out from the TDS method after we made some policy changes. All these factors are having a say in revenues, and let us hope that nothing untoward happens during the third and fourth quarters. Then, at the end of year also, we should be able to achieve a reasonable growth rate.
The Securities Transaction Tax collections are imroving. What is your expectation now?
It will depend on how the market behaves during the next five to six months. Even during a bull run, one cannot say when bears will come back to the market. So, if it goes up, obviously, STT collection would be far better than what we imagined in the Budget Estimate. We should be crossing BE, may be by September-October. I am sure we will be much better-off, but this amount is small comparedto the overall tax figures.
What are the key factors behind GST collections at this level? What is the way forward?
GST system has evolved or is still evolving; so yes, compliances have improved and GSTN is far more developed. We are also realising how people are faking. We are able to see that if a person is suddenly showing a spike in the revenue, does he have any imprint on income tax and how old is that firm. We are able to red flag that in the very first or second month; people do a check on them.
We also know the areas in which a lot of evasion or fake invoices happen. Particular sectors are known for this, so better eyes are being kept on them. The Director General (GST Investigation) is working well. We have arrested nearly 700 people, including 16-17 professionals, and have detected a lot of fake invoices. All this is resulting in better revenues.
Earlier, people were not filing six to eight returns. We have cases where people are filing GSTR 1, but not GSTR 3B. So, we have put a check on that and that check is going to become stricter from January. All these are sending messages that compliance is a must.
Instead of the ₹1-lakh crore figure that we used to look at, we will now perhaps not talk below ₹1.5-lakh crore.
The Finance Ministry set a target of September 15 for improvement in the new income tax portal. Now, the due date for filing returns has been extended. What is the progress on the new portal?
We have extended the date for filing because the portal was not working perfectly. But I still have data to show improvement. UntilThursday, about 1.55 crore returns were filed. On an average, 2.7-2.9 lakh returns are being filed on a daily basis.
Then, there are lot of forms such as 15G/15H. On an average, 13,000 are being filed. So, 12 lakh forms have been filed so far.
The portal has improved with the number of returns being filed going up. Noise on social media has also gone down. But I should still accept there is still some way to go. We are constantly having meetings with Infosys. There are 25 CAs working pro bono with them, besides other professionals who have come forward. They interact and point out the defects. Every alternate day, my teams sit with them. At least once a week, I sit with Salil Parkeh and we go through detailed presentation.
We have told them that out of 100 people, 97 filed without any problems while three faced glitches on the same thing; so you have to do something for them. It is far better than June 7 which was a nightmare.
They have also employed 750 resources and allocated a person full time, who is looking at the project as a whole.