CBIC chairman says he has a new strategy to raise GST collections

April goods and services tax (GST) collection crossed the Rs 1.5 lakh crore mark for the first time and the Rs 1 lakh crore mark for the tenth month in a row. And, if things go to plan, Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Johri is hopeful of continued buoyancy this fiscal in the range of Rs 1.35 lakh crore per month.

“GST collections have been consistently higher than the GDP growth rate. There is a bounce-back in the economy, and the inflation and boil in oil prices have helped. Revenues will be under pressure on the Customs side because of rising commodity prices. Excise will take a hit because of the duty cut,” Johri said while addressing a FICCI conclave.

“But to continue revenue buoyancy, we have changed our strategy. One possible way to continue revenue stream is to rationalise the tax rates to let refunds and credits flow freely, reverse the inversions,” he said.

The CBIC chairman said the government might look at improving revenues via legal and administrative changes, including tightening enforcement to curb leakages and going for better compliance.

“Legal changes were made to facilitate taxpayers to file their returns, which they could not do during the peak of COVID, and make the tax filing experience better. We have improved our systems on e-invoicing, which enables us to construct the tax-paying structure and credit system. Auto population of returns and inter-connectivity of returns has helped in fastrack credits and reduce the compliance cost for taxpayers,” Johri said.

He added that a structure to facilitate small, medium and large taxpayers had been created to help reduce the tax compliance burden. “We also went for Aadhaar authentication to ensure the credit system is not misused,” Johri said.

Johri said his department has been making efforts to ensure unlawful practices leading to tax avoidance are reduced, and risky taxpayers are identified at the earliest.

“By implementing data triangulation with DGFT (Directorate General of Foreign Trade) and income-tax department, we have culled out risky taxpayers and have suspended their registrations. Wrongdoers and those who were gaming the system have been culled out,” Johri said, adding as GST turns 5-year-old, his department is making every effort clear to reduce abuse of the system and improve compliance.

His department is also devising strategies with states to weed out wrongdoers. Johri said that his department had been able to “unearth more than 20,000 GSTNs and led to a recovery of Rs 2,400 crore through drives to weed out fake ITC and fake taxpayers.

Johri feels nudging taxpayers to file returns on time yielded better collections. “GSTR3B filing has gone up from 73 percent in January 2021 to 80 percent in February 2022. And the entire exercise of revenue augmentation over the past two years has been driven by data analytics and data triangulation,” he said.