It is been said that the Governments that are transparent and accountable deliver more prosperity to their people. Making data more accessible and useable leads to insights & innovation and enables better-informed decision-making. These are the ideas behind the movement for open government and open data. Financial transparency has always been a key solution to improving governance and accountability.
As all the taxpayers are aware that effective more 01.06.2020 Form 26AS has been restructured as “Annual Information Statement” to include details of comprehensive information relating to SFT, payment of taxes, demand / refund, proceedings, etc. Now it would also include turnover reported in Goods and Service Tax (GST) return GSTR 3B. The monthly turnover (taxable as well total turnover) detail has already being displayed in Form 26AS beginning from A.Y.2020-21up to the period for which GST Returns are being filed.
Rationale??
Department of Revenue have suspected few cases where crores of rupees of turnover is reported under GST, however not a single penny of tax being paid under Income tax. The suspected fake invoice generators are being identified under GST & other laws and their GST registration were suspended based on the fact that whether their income tax payment justifies the expected profit margin on turnover reported by them in GST returns.
Furthermore, this display of information in Form 26AS would ease the reporting requirement of GST turnover details under Income Tax as the same would be readily available in Form 26AS & thereby an important step towards Transparent Taxation – honoring the honest.
On the other hand, it would force the tax evaders to now correctly report their turnover & thus pay correct taxes under Income Tax.Also, this would promote ease of compliance as the information regarding turnover reported in GST returns would be readily available to the taxpayers at the time of their Income Tax Returns.
Would it lead to any additional compliances??
As far as honest taxpayers are concerned there won’t be any change in the reporting requirement or any extra compliances burden as they already furnish correct turnover under GST as well as Income Tax. These details are just for the information of the taxpayers. There may be some differences in GST 3B filed & GST turnover in Income Tax which would be explicable but it can’t happen that the person shows crores of rupees in GST and doesn’t pay any income tax. As far as matching the turnover details with the books, differences may arise due to internal stock transfers which would be displayed on IT portal (& in GSTR 3B as well) but is not part of sales as per books.
The justification for greater transparency is a little more convoluted. Since regulatory bodies exist to enforce the professional practices that people in general have been unable to follow under their own oversight. These additional details in Form 26AS will revolutionize its use in terms of transparency, persistent & simplified information deliverance; thereby
