A tax-enforcement mechanism that prevents generation of e-way bills required for transportation of goods in India by those who do not file their GST returns has been reactivated. It was suspended during the pandemic, when widespread restrictions made compliance difficult. But now that India’s economy is running again, this tool has been reintroduced.
The reactivation was done by the GST Network, a digital system that matches the data of buyers and sellers to reconcile transactions. For example, buyers of raw materials cannot claim input credit unless their sellers file their GST returns. Preventing the defaulter from carrying the goods, as stated in the Explanation, should compel them to comply and should not deprive other taxpayers of input credit. Still, the rigidity of the system is worth a closer look. While road, rail and other movements may be denied permission to enforce return-filing, it also involves a spanner thrown in a kind of business operation that does not harm other GST assessees. But what if technological advances allow this strategy to be pursued? Imagine critical work software for a missed GST filing in the blink of an eye. Ease of doing business will have a huge impact.
Don’t miss a story! Stay connected and informed with Mint.
download
Our App Now!!
.