CA urged to help raise tax compliance

The Goods and Services Tax (GST) regime would stabilise in the next 18 months, Niti Aayog vice chairman Rajiv Kumar has assured.

“Give us time and you will see that in the next 18 months, GST will get stabilised, and this is where I think your (CAs) role is critical,” he told delegates at the Southern Regional Conference of the Institute of Chartered Accountants of India (CA) in Bengaluru on 22 Dec 2017.

But he regretted the attitude of some in business community, saying “Unfortunately, some of you are trying to scare investors away from GST rather than helping them. I think it is rather unfair.”

Kumar sought CAs cooperation to erase dualism in terms of organised and unorganised sectors which would be good for the economy.

Formalisation of the economy will give a fillip to tax compliance. At present, tax compliance is between 40% to 43%. It must increase to 90%. The role of CAs becomes that much important in achieving this target, he added.

Kumar also disclosed that tax rates under GST will rationalise into three slabs of 0% 12% and 28%, from five at present.

However, a single tax rate GST was impractical, given the size of the country which is equal to all European nations from Moscow to London put together.

Diverse cultures and business ethics followed by each Indian state which makes it necessary to have those multiple rates, he explained.

He also conceded the drag of demonetization, saying the government may not have been able to convert all black money into white, but it has converted black money into grey.

“Believe me, Rs.4.5 lakh crore that has returned to banks by way of demonetisation will be acted upon,” he pointed out. fii-news.com