Hyderabad: The GST Network project (GSTN), a unique and complex IT initiative, set up for implementing GST from July 1 has been primarily designed to check tax evasion and fix cheating by anyone at any level during tax administration.
It will be hard to evade this process because breaking the chain will be visible across the system. Moreover, the inevitable linkage to direct tax will mean that it will be progressively harder to cheat on income-tax as well.
The GSTN can use data-mining techniques to detect tax fraud. For instance, the wrongful use of tax rules or the creation of non-existent dealers to claim illegal benefits that exist in the current VAT system can be easily detected.
Currently, the Centre and state indirect tax administrations work under different laws, regulations, procedures and formats and consequently the I-T systems work as independent sites due to which there was scope at any level for resorting to irregularities.
The GSTN enables capture, processing and exchange of information amongst all the stakeholders (taxpayers, states and centre, accounting offices, banks and the RBI).
The Central Board of Excise and Customs (CBEC) has been rechristened Central Board of Indirect Taxes and Customs (CBIC) headed by a chairman and will have six members — for GST, IT, legal and compliance verification, investigation, tax policy, customs and administration and vigilance.
Using the PAN number has the added benefit of reconciling direct and indirect taxes paid by every entity and creating a comprehensive record of every taxpayer’s payment history, making it easier to audit payments and catch any instances of fraud....