New Delhi: Union minister Arun Jaitley on Friday said implementation of the goods and services tax (GST) has helped in expanding the direct taxpayer base, reflected in a 44% growth in personal advance income-tax collections this year.
In a Facebook post, Jaitley said direct tax collections are expected to be significantly higher this year.
“The implementation of GST as a single consolidated tax has had a significant impact even on direct taxes. Those who have disclosed a business turnover for the GST now find it difficult not to disclose their net income for the purposes of income tax,”Jaitley said.
“Last year, the impact of GST on direct tax collection was not visible. Since GST had been imposed in the middle of the year, it will be more apparent this year. The first big news for this year is that the advance tax deposit during the first quarter of this year has seen a gross increase of 44% in the personal income tax category and 17% in the corporate tax category,” he said.
GST, implemented on 1 July, has forced more businesses to come under the tax net. This is because GST is a destination based tax and it is important for the entire supply chain to be registered under GST for seamless input tax credit claims. Jaitley attributed the growth in tax collections to the anti-black money measures taken by the government, use of technology, demonetization and GST.
The Modi government took a slew of measures to tackle black money, including enactment of a stringent foreign black money Act and the strengthening of the benami properties Act. Measures like demonetization and GST have also helped the government detect tax evaders and expand the taxpayer base. The number of new assessees who filed direct tax returns in 2017-18 was more than 10.6 million.
Jaitley said India’s tax to gross domestic product ratio increased by 1.5 percentage points in the four years of the Modi government despite taxation relief in the budgets and hoped that this would increase further this year.