Government to vet GST, income tax and transfer pricing filings to find leakage

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The government is planning to compare data filed by companies with different departments to detect discrepancies and check whether there’s been any leakage in tax collected, raising the prospect of even greater scrutiny, said people with knowledge of the matter.

Goods and services tax (GST) returns, income tax filings and transfer pricing submissions will be analysed and synchronised in a manner that hasn’t been possible before, they said. Multinationals including banks, fast-moving consumer goods (FMCG) companies, tech firms and automobile manufacturers fear that such cross-referencing of data will lead to increased scrutiny and eventually higher tax outgo. Such comparisons weren’t possible earlier as the data wasn’t uniform nor was it organised in manner that would allow such matching. It was also the case that various departments didn’t ordinarily share data.

Many companies have been urgently asking tax advisers to advise them on how to file returns so that they don’t end up being slapped with excessive levies. Some transactions such as royalty payments, CEO salaries and valuations of Indian operations will now come under the scrutiny of not just the indirect tax department but also the direct tax and transfer pricing departments.

Read More at: https://economictimes.indiatimes.com/news/economy/policy/government-to-vet-gst-income-tax-and-transfer-pricing-filings-to-find-leakage/articleshow/65584614.cms

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