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Now GST department’s eye on banking transactions also, know what is the government’s preparation

Good and Service Tax Authority is now monitoring the banking transactions of taxpayers for real time access. This means that the identification of fake invoices and the use of input tax credit inputs can be done by the business section. Recently investigation by GST department has revealed that undue tax credit through fake invoices is being used for hawala transactions.

It has been found in many cases that money is coming back to the person making fake invoice through many transactions in the last transaction. Shell companies are also misusing money through fake bills. Money trail is important in these cases, reports Financial Express.

Multiple accounts in one business 

Taxpayers give only one bank account details during GST registration and a business can use multiple accounts. At present, it is difficult to get even the data of banking transactions. FE quoted sources as saying that by the time the details are given, the company or person making the fake invoices has already disappeared. In such a situation, GST officials now want to get fast data on banking transactions.

Preparation to curb tax evasion 

At present, to keep an eye on tax evasion, the Income Tax Department receives data on high value transactions, suspicious transactions as well as cash deposits above a certain limit. The report states that the issue has also been raised by the Central Board of Indirect Taxes and Customs (CBIC) to stop fake invoices so that tax evasion can be curbed. It has been said in the report that there is a need for discussion and discussion with RBI.

Planning to stop tax evasion 

GST officials are planning to include more databases in their risk parameters to nab potential tax evaders. This will be done more for service related business. Databases that are likely to be tapped.

What will change 

If this is done, it will be known that what kind of services are being provided by many companies and whether they are paying the right tax and availing input tax credit. However, the GST authorities are already planning to cross-check the filings of the Ministry of Corporate Affairs with the income tax database to cross-check taxpayers’ details and understand whether they are paying the correct tax.

1.4 crore businesses registered under GST 

Significantly, the focus on tax evasion has come at a time when the GST department is trying to curb fake invoices and tax evasion. There are 1.4 crore registration businesses and professionals under GST. Government wants to expand taxpayer based by fixing tax on tax evaders.


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