With the recession, tax evasion will prove challenging for the government in achieving tax targets

New delhi date. August 20, 2019, Monday

With the downturn in the economy of the country, the contamination of tax evasion will be challenging for the Modi government at the center of achieving a tax target. Despite the Consumption Tax (GST) filed in VII, there has been no significant success in preventing tax evasion.

Consumption tax is believed to have been filed with the purpose of boosting taxation and promoting economic growth. The number of filing of Goods and Services Tax (GST) returns in the country has also dropped, said the Comptroller and Auditor General of India (CAG) report.

In the midst of the economic downturn, poor tax compliance has raised concerns about the government's tax collection. Demand for cars has dropped in the country from cookies to cars. The NBFC crisis has had an impact on the contribution of consumptions to India's GDP at 5%. As a result, the GDP figure has fallen to a five-year low.

It was expected that tax evasion would be reduced due to GST, but there are cases of tax evasion being implemented in the country. Several methods of tax evasion such as bogus billing, fraudulent invoicing are coming to light.

One should not assume that such a change in the taxation system will quickly stabilize the situation, ”said a tech consultant. According to preliminary data, the revenue through the country's tax revenues in the last financial year was Rs 1.8 trillion less than the target.

A deficit in revenue could mean the government's fiscal deficit of 5.7 percent, making it difficult to achieve. The government may be forced to cut spending on infrastructure and welfare programs due to revenue deficit.

The finance ministry expected the country's economic growth rate to rise by two per cent due to GST, but despite the reduction in GST rate to increase consumption, the country's economic growth rate declined to 1.8 per cent in the March quarter.

The situation in the GST system will improve once the IT system is very strong in developed countries where this method is applicable, the consultant added.