That and improved compliance aided GST collections to touch a record high of Rs 1.15 lakh crore in December, Pandey told ET in an interview. “December traditionally has been a month of subdued collections…but the transactions show that we’re on the continued path of recovery.”
He attributed some component of the surge in revenues to the drive launched to identify tax evaders and those availing input tax credit fraudulently. The revenue department will continue the crackdown on such activities, said Pandey who is also the revenue secretary.
GST collections for December touched an all-time high of Rs 1.15 lakh crore, reflecting transactions of November which included Diwali sales but also restrictions in major parts of the country due to resurgence in Covid-19 cases.
“For 5-6 months we had a lockdown, we knew the constraints. We lost a certain amount of taxes during the months… We’re trying to recover them through the improved compliance,” Pandey said.
He said the department had complete data from GST, customs and income tax, which it will use along with artificial intelligence and data analytics to identify those indulging in tax evasion through various means including through fake bills or intermediaries.
On a tax base of 12 million, about 7,000 companies have been investigated, enabling targeted action.
Faster dispute resolution
“We’re also trying to simplify tax laws which is why we have removed exemptions and deductions from corporate tax,” Pandey said, adding that the government is trying to create a robust framework leading to minimal disputes.
On concerns over the large pendency in Advance Pricing Agreement regime, he said the government will study the problem and would ensure disputes persisting in areas beyond a certain reasonable period are addressed. “For that purpose, if any systemic changes or more manpower and training is required, it will be done.”
The government, he said, is examining if it can provide certain defined parameters so that most disputes are taken care of. “This is why we’re simplifying tax laws because every time we grant a concession to any sector, it does create a complication for the tax system and discretion at the hands of authorities and different interpretation, and hence disputes.”
Asked about revenue jump from dispute settlement scheme Vivaad Se Vishwas Scheme (VSVS), Pandey said the total tax amount that would be settled is around Rs 83,000 crore. However, he said the final amount can be computed only after the tax payment as taxpayers would only be making part payment.
Under VSVS, there are 510,000 appeals pending in various fora, he said. Till January 2, 96,000 cases had come, he said. The government had first allowed payment till March 31, 2020, and the date has been extended for availing the scheme till January 31.
On the new Carotar (Customs Administration of Rules of Origin under Trade Agreements) Rules, 2020 delaying movement of goods at customs, Pandey said the purpose of the rules was to ensure that terms and conditions of Free Trade Agreements are adhered to.
“It was being noticed that imports were happening through FTA countries without any value addition,” he said, adding that if such imports are allowed, it would mean revenue loss for the government and a non-level playing field for industry.
He said very limited people were impacted by these rules and added that the government had already allowed companies importing from established businesses in FTA countries to use validated documents for value addition for multiple import consignments.
On faceless assessment, Pandey said that by December end out of the first lot of 58,319 cases, the Central Board of Direct Taxes (CBDT) had issued final scrutiny assessment orders in 24,711 cases completely through the faceless system. In 94% of cases, the explanation of the taxpayer was accepted and no additional tax or penalty was imposed. Only in 1,551 cases, concealment or understatement of income was established and addition of income has been made. These numbers dispel the myth that faceless system is causing hardship to the taxpayers, he said.