The Goods and Service Tax (GST) has resulted in the greater formalisation of the Indian economy with over 6.5 lakh…
GST Bhavan. (Photo: IANS/File)
The Goods and Service Tax (GST) has resulted in the greater formalisation of the Indian economy with over 6.5 lakh new assessees having sought registration under the new indirect tax regime, the government said on Monday.
A Finance Ministry release here said that this increased tax information flow would help to eventually boost both direct and indirect tax collections in the country.
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“In the past, the Centre had little data on small manufacturers and consumption because the excise was imposed only at the manufacturing stage, while the states had little data on the activities of local firms outside their borders,” it said.
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“Under the GST, there will be now the seamless flow of availability of a common set of data to both the Centre and the States making Direct and Indirect Tax collections more effective.”
The Ministry reported “early signs of tax base expansion.”
“Between June and July 2017, 6.6 lakh new agents, previously outside the tax net, sought GST registration. This is expected to rise consistently as the incentives for formalisation increase. Entire textile chain is now brought under tax net,” it said.
“Further, a segment of land and real estate transactions has also been brought into tax net ‘works contracts’. Besides, formalisation will occur of cement, steel and other sales, which earlier tended to be outside the tax net, because builder will need documentation of these input purchases to claim tax credit,” it added.
The government also said more steps are being taken for further simplification of processes in order to facilitate tax payers and to extend benefits to customers.
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