From the very beginning the Narendra Modi Government wanted to make India a tax compliant nation and to fulfil his ambition he has been laying groundwork so that his fellow Indians can participate in this drive with him.
When he came into office he took upon the task of increasing the presence of every country man in government record so he started with the providing every citizen with a unique ID (Aadhar card). Then he started opening every citizen bank account. Then he hit the economy with the a brahmastra called demonetisation. It disoriented the economy in every possible manner. When you start looking in the past you may start to realise that he have been planning all this from the very beginning.
And now he has shifted the country to the GST tax system. We all do agree that it has been passed with the picture to increase the ease of doing business. But it had the hidden objective to broaden the tax net and to encircle the traders into it. Now lets understand how Modi Ji has planned to curb tax invasion.
Ways in which GST will make India a tax compliant nation
Monitoring of every good
Lets try to understand this with an example. Every business will have a unique GST number in the GSTN. Suppose a company produces a footwear items. He has to pay taxes on every footwear and when he files returns every footwear item gets listed in the government documentation. It has to go all the way to the retailer before it reaches the costumer. Government has all the record on how many items does the retailer have in his possession and if the retailers fails to file return of any less no. of items then he has explain his position.
Key things to prevent tax evasion are Input Tax Credit a massive IT backbone called GSTN and a system to monitor the movement of goods. The introduction of online monitoring system has brought transparency to the whole ecosystem. All merchants have to register for GST and they have to file taxes, rectify returns and pay indirect tax.
With these improved procedures to monitor movement of goods and services it has been impossible for the supplier to keep it out of the books and at the same time reach it to the final consumer.
Keeping the corrupt out
While travelling across states you may see a big line of trucks waiting to cross the border.If you look closely you can see some officer checking the trucks for it’s goods. You have to pay a certain rishwat even if all your paper are in order. So with the introduction of GST these road barrier are to be abolished and online documentation will help to curb these corrupt practises.
It’s not like that GST will eradicate the tax evasion to the ground and you cannot blame it for this as there will always be certain loophole in whatever you will introduce but it will help a lot in making India a tax compliant nation.