The Department of Revenue (DoR) released a statement saying that the data analytics has detected few Permanent Account Numbers (PAN) showing turnover of crores of rupees in Goods and Services (GST) returns but not paying a single rupee in income tax. Also, it announced that there would be no change in the reporting requirement due to the auto-population of GST turnover in Form 26AS.
The GST turnover is auto-populated in Form 26AS just for the information of the taxpayer at no extra cost. The DoR also acknowledged that there might be some differences in GSTR-3Bs filed and the GST shown in the Form 26AS. But it can not happen that a person shows a turnover in crores in GST and does not pay a single rupee of income tax.
The DoR said that the Income Tax Return (ITR) for the AY 2020-21 requires reporting of GST outward supplies in the Schedule GST. Therefore, the information displayed in the Form 26AS would ease the compliance. There would be no change in the reporting requirement with the auto-population of information of GST turnover in Form 26AS as the honest taxpayers are already furnishing GST returns and income tax return and reporting their turnover correctly.
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It can be seen as an important step in the direction of “Transparent Taxation – Honoring the Honest”. The auto-population of information on GST turnover in Form 26AS would force dishonest taxpayers who are under-reporting their turnover in the ITRs. This will consequently force them to pays the correct income tax.
The DoR has noticed that many unscrupulous persons are availing or passing on Input Tax Credit (ITC) fraudulently by generating fake invoices. It has already formulated a strategy for identifying these fake invoice generators, which among other things, takes into account the income tax profiles of the suspected fake invoice generators.
With this move, the suspected fake invoice generators are being identified for serious action under GST and other laws including suspension of their GST registration based on the fact that whether their income tax payment commensurate with the expected profit margin on turnover reported by them in the GST returns.
For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.
