GST returns non-filers grow faster than tax base

New GST Return System ready and may be rolled out by 2019The number of tax filers failing to file their returns has been increasing in the 17 months of GST implementation until November 2018, according to an answer submitted by the Finance Ministry in the Lok Sabha.

While the number of people required to file monthly returns has grown 32% from July 2017 to about 98.5 lakh in November 2018, the number of people not filing these returns has grown 167% during that time, the latest Goods and Services Tax filing data showed.

The data also shows that this is not just the case for monthly filers, but also for those under the composition scheme, which allows for quarterly return filing.

While the number of people required to file quarterly returns increased about 55% from July 2017 to 17.74 lakh in November 2018, the number of people who have not filed returns increased about 162% during this period.

In other words, the number of people failing to file returns has grown faster than the tax base itself for both regular and composition filers.

Tax analysts say the reasons are varied, including some taxpayers having too low a turnover, and others getting registered onto GST only due to the insistence of their large clients, and yet others simply daunted by the filing process.

However, some also point towards a more serious situation where small businesses are systematically and fraudulently evading tax in the hope that they are too small for the taxman to notice.

Another analyst explained that, in reality, there are a relatively small number of taxpayers that fall below the ₹20 lakh threshold for filing returns.

 

 

 

 

 

Source: The Hindu

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