Weeks ahead of the Budget, the finance ministry has revised its target for goods and services tax (GST) collection in January and February — to Rs 1.15 trillion, from the earlier Rs 1.1 trillion. This would be achieved by detecting fraudulent input tax credit using data analytics.
At a meeting convened by the Department of Revenue, under the finance ministry, the target for March was retained at Rs 1.25 trillion.
This means the government aims to collect Rs 10,000 crore more than what was targeted earlier at a time when all months till December in the current financial year (FY20) yielded less than Rs 1.1 trillion, except for April.
Last month, the target for December, January, February and March was set at Rs 1.1 trillion, with one of the months to yield Rs 1.25 trillion. However, the December collection stood at Rs 1.03 trillion. Four of nine months in FY20 so far have delivered less than Rs 1 trillion in GST collections.
Parag Mehta, partner at NA Shah Associates, said, “Considering the sluggish economy, it is an ambitious target. Even during the festive period of Diwali, the collections could touch only Rs 1 trillion.”
The meeting, attended by senior officials of the Central Board of Indirect Taxes and Customs (CBIC) and the Central Board of Direct Taxes (CBDT), highlighted that the GST authorities would look into the mismatch of supply and purchase invoices, failure of filing returns, and over-invoicing, among other things, said sources.
The authorities would also look at fake or excess refunds availed beyond the permissible limits, plugging tax leakages, fake or huge input tax credit (ITC) claims, and data analytic review of all the refund under inverted duty structure, the sources said.
Sources said that SMSs and emails will be sent to those claiming fraudulent or excess ITC, defaulters, non-filers and those who provide mismatched information in their returns or over-invoice or who have been identified through data analytics for evading tax by duping the system through rogue modus operandi.
Taxpayers who have taken ITC wrongfully can voluntarily repay an amount equal to inadmissible credit before verification and punitive action is taken against them, the sources said.
It is further learnt that electronic communications to such people would be followed by visits from the GST field formations.