The Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services in India. It was implemented on July 1, 2017, and has since been a critical source of revenue for the government. The GST department has been making efforts to streamline the tax collection process and plug revenue leakages. In a significant move towards this goal, the GST department is set to get access to banking transactions of taxpayers.
As per a recent announcement by the Central Board of Direct Taxes (CBDT), the GST department will soon have access to the banking transactions of taxpayers. The move is aimed at curbing tax evasion and improving compliance. The GST department will be able to access information on deposits, withdrawals, and other banking transactions of taxpayers from banks.
The move is expected to help the GST department in several ways. First and foremost, it will help the department to identify cases of tax evasion. By comparing the banking transactions of taxpayers with their GST returns, the department will be able to identify discrepancies and take appropriate action. This will also help in identifying cases where taxpayers have claimed input tax credit (ITC) wrongly or where they have not deposited the tax collected from customers.
The move will also help in improving compliance among taxpayers. With the GST department having access to their banking transactions, taxpayers will be more cautious in their transactions and will ensure that they are filing their GST returns correctly. This will also help in reducing the number of cases where taxpayers are penalized for non-compliance.
However, the move has also raised concerns about privacy. The access to banking transactions of taxpayers is a significant invasion of their privacy. To address these concerns, the CBDT has assured that the data will be accessed only for the purposes of tax administration and that the data will be kept confidential.
In conclusion, the move by the GST department to get access to banking transactions is a step in the right direction. It will help in curbing tax evasion, improving compliance, and plugging revenue leakages. However, it is important that the access to banking transactions is used judiciously and only for the purposes of tax administration. It is also important to ensure that the privacy of taxpayers is not compromised.