States call on centre for real-time data access of GST returns, e-way bills

Some states have placed a request for real-time access to the annual GST returns and e-way bills to keep a check on tax evasion. It is understood to tackle the ongoing fund crisis faced by some states potentially. 

The GST Network currently stores the return filing data together with that of e-way bill. In turn, GSTN collates information in reports and shares them to all the states and Union Territories with some lag in time.

As per the data released on the GST portal, usually, 16% of eligible filers do not file every month. This number is only rising, reaching 25% by October 2019.

Thomas Isaac, Kerala’s Finance Minister, affirmed to the publication Hindustan Times that Kerala might not need the compensation cess but on a condition. He further added that his state must be permitted to access the annual returns and e-way bills on a real-time basis to curb the tax evasion.

As per him, a real-time update would serve many states to bust the tax evaders by using data analytics. He plans to raise a requisition with the GST Council in the upcoming meeting. 

Similarly, officials said that states’ access to the real-time data would be addressed, provided it is raised before the Council. Various states have so far been raising the issue of a massive GST evasion before the Council. In one instance, Amit Misra, the Finance Minister of West Bengal pegged the GST evasion at Rs 1 lakh crore in 2018. He demanded a meeting exclusively to be held for discussing the issue.

Also Read: GST Collection for December Goes Beyond Rs 1 Lakh Crore

Due to the shortage in compensation cess funds, the Centre has not paid the states for October and November 2019 due in the second week of December 2019. The delay recurred in August and September 2019 and cleared just two days before the 38th GST Council meeting held on 18 December 2019.

A sum of Rs 35,298 crore was disbursed on 16 December 2019 to pay the dues to the states in August and September. The GST law assures a 14% growth in the state revenue for five years. The Centre stays committed to meet any shortfall in the annual revenue targets through cess money. Currently, the cess is levied on all the luxury items and sin products such as cigarettes, liquor and tobacco products.

Many tax experts have expressed on the viability of allowing access to the states and Union Territories. They confirmed that the access would provide extra powers to the states to monitor the revenue collections, giving transparency and also take suitable action on the tax defaulters and evaders.

The GST Council and GSTN are continuously looking into streamlining the filing process and plug gaps in GST law. On the other hand, the government is holding regular sessions with the taxpayers and officials to understand their concerns and direct, quick redressal options. The National Conference was held on 7 January 2020 to address the same.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in