Lessons For Transition to GST - CAG's Recommendations
ASSUMING that all States agree and an Act is in place, are we ready for GST?. The CAG had recommended that:
++ A road map for resolution of issues from the legacy system may be drawn up before the switch to GST.
++ Place automation high on priority. To begin with, e·filing may be made mandatory. The tax returns must be simple to reduce the cost of compliance to the assessee but they must also provide the basic data for scrutiny to establish the trail of transactions.
++ The Government of India may steer the development of software , which will standardise the processes across the country. The software must enable non -intrusive and system -based scrutiny of returns; detect non -filers or dormant dealers and selection of sample for tax audit.
++ Due priority must be placed for integrating all units (including check gates) within the States as also Inter-State .
++ The Act should specify timeframe for scrutiny of tax returns (and process ITC claim and refunds ) that will bind the tax administration for efficient service delivery , which in turn will enhance taxpayer confidence in the new system.
++ Ensure that departmental manuals are prepared for standardising the entire gamut of processes and align the internal controls with the GST.
++ Training of staff with due emphasis on advocacy , is central to the success of GST
++ The periodicity for filing the returns may be fixed in accordance with the turnover of the respective dealers. This will reduce the burden on the department and ease monitoring on the dealers.
++ Refine the risk-based selection of dealers for tax audit to generate a sample that is both viable and effective in detection of evasion.
++ Prescribe a comprehensive mechanism for cross verification of the returns of the dealers with other records like returns of other dealers, Income Tax/Customs/Central Excise Departments and TINXSYS website. The States may be incentivised for timely uploading of data in the TINXSYS . TlNXSYS should provide an option for the user states to upload the utilisation of declaration forms as also for the States to upload list of dubious TINs.
++ Minimise discretion in clauses relating to penalty across different types of offence.
++ Install a mechanism to monitor any deviations in the GST that distort the GST.
Does anyone listen to the CAG?