Government to investigate possibilities of implementing online GST audit

A high-level Parliamentary panel has recommended that the government investigate the possibilities of implementing an online audit mechanism in GST in order to make the procedure more efficient and less intrusive.

In its report on demands for grants for the Finance Ministry’s Revenue Department, which was presented in Parliament on Thursday, the Parliamentary Standing Committee on Finance recommended that the government prepare a white list of documents that would be required for conducting an audit, which would serve as a guideline for both officers and assessees.

The panel made these recommendations after seeing that assessees are being summoned to GST offices for physical appearances, which wastes a significant amount of time not only for the assessees but also for department personnel.

The committee also stated that in order to broaden the net of tax deduction at source (TDS) and tax collection at source (TCS), several new transactions, such as large cash withdrawals, foreign remittances, purchase of luxury car, e-commerce participants, sale of goods, acquisition of immovable property, and virtual digital assets, were brought into its ambit.

“The committee believes that the TDS and TCS methods have proven to be not only efficient and revenue-boosting over the years, but also non-intrusive in nature, which reduces discretion and promotes better tax compliance. While recognising the Ministry’s initiatives thus far, the committee proposes that TDS and TCS coverage be increased to encompass additional transactions involving large amounts of cash,” according to the study.

Concerning search and seizure activities, the panel advised that they be conducted with prudence and caution.

“It is expected that due diligence will be fully carried out before undertaking these enforcement operations, in order to pre-empt legitimate complaints and ensure proper tax realisation.” “The committee believes that while increasing enforcement action against willful or chronic evaders, honest taxpayers should not be alienated,” the group advised.

The committee also advised the government to make the filing of income tax returns easier and more user-friendly.