Post note-ban, 1.8 million new taxpayers added

Post note-ban, 1.8 million new taxpayers added

Post note-ban, 1.8 million new taxpayers added
Post demonetisation move, the government has claimed that there has been an increase of 1.8 million in individual income tax filers since November 2016.

According to the Economic Survey 2017-18 released on Monday, the Goods and Services Tax (GST) has increased the number of unique indirect taxpayers by more than 50% -- a substantial 3.4 million.

Of their total turnover, business-to-consumer (B2C) transactions account for only 17% of the total GST filings. The bulk of transactions are business-to-business (B2B) and exports, which account for 30% and 34% respectively.

The survey said that traditionally, there was a 0.8% monthly increase in new tax filers – representing growth of 10% annually before GST and demonetisation.

"The level of tax filers by November 2017 was 31% greater than what this trend would suggest, a statistically significant difference. This translates roughly into about 1.8 million additional taxpayers due to demonetisation-cum-GST, representing 3% of existing taxpayers," the survey stated.

Further analysis in the Survey suggested that new filers reported an average income, in many cases, close to the income-tax threshold of Rs 250,000, limiting the early revenue impact to the Union government. "As income growth over time pushes many of the new tax filers over the threshold, the revenue dividends should increase robustly," it said.

The survey's analysis showed that 10 million new people filed tax returns between November 2016 and November 2017, compared with 6.2 million during the same period in the preceding six years.

Despite all this, the government has been battling to sustain the GST collections. After initially blaming it on the lowering of tax rates, the government blamed it on lack of e-way bill and expedited its implementation.

In a more recent development the government announced a crackdown on the 'small traders', as according to them there is a large chunk of traders evading taxes using the provisions of composition scheme.