MUMBAI: A slowdown in tax collections is pushing Prime Minister Narendra Modi’s administration to be more vigilant on compliance.
Collections under the new goods and services tax dipped to Rs833 billion ($13 billion) in October from about Rs920 billion the previous month, and the central bank is wary of a further dip after the government lowered rates on several items to win public support before state elections. The weakness in GST collections following a July 1 roll out has pushed down overall revenue growth.
In response, India’s tax office this month asked officials to compare payments made by the top 100 assesses in each of their zones to understand variations in pre- and post-GST payments, according to an internal letter seen by Bloomberg News. “For the purposes of collecting this data, the officers may contact the assesses personally and/or visit their premises,” the note said. Finance Ministry spokesman D.S. Malik declined to comment.
Reports of evasion are already coming in with the GST being decried as technologically tedious and expensive. Lower revenue risks worsening Asia’s widest budget deficit and extending the region’s steepest jump in bond yields this quarter.
