Goods and Services Tax has been the Talk of the day.
The Centre has now planned to integrate Direct and Indirect Taxation systems for all indirect tax payers by linking the GST number with the PAN (Permanent Account Number) issued by the Income Tax (IT) Department.
This the Government adds would curb, malpractices in tax arena, and pave way for cross checking of IT payments with GST, and thus keep a check on Tax evasion. This will bring the GST-PAN linked system in line with the prevailing PAN based system for I.T facilitating data exchange and tax payer compliance. The advantages foreseen are:
- A PAN linked system would bring a co relation between direct and indirect tax payments.
- The PAN linked number, will be advantageous with the PAN having an all India Presence.
- PAN had a total base of 240 million against 6.56 registrations, made so far on the GST network.
- A relevant management information system would come up to ensure the total sales reported under GST and details provided in the IT returns should match up.
- Earlier, Aadhaar was proposed to be used for the purpose but was dropped since Aadhar is issued only for individuals, and business identification would be for all legal entities including individuals, companies and partnership firms.
- Of course there are concerns about limited number of GST service providers approved as of now and the reliability of the linkage between the firms and application service providers.
- Also, ability of micro and small retailers is doubted in submitting online returns.
- With the short term disruption, it is envisaged that it would take some more time for things to settle.