Jaitley said with the implementation of GST, the ability to discover a direct tax income of the tax department will also increase.
Finance Minister Arun Jaitley on Thursday said high tax evasion could mean that the standard rate of the Goods and Services Tax (GST) may remain high.
“There is a big debate on the standard rates of GST which depends on various factors . Amongst many factors that would impact the arithmetical calculation of the rate , one of the key factors is the higher the number of exemptions, the higher would be the standard rate. And accordingly, higher the amount of evasion, higher would be the standard rate,” said Jaitley, who was speaking at a conference organized by FICCI and the ICAI in Mumbai on government’s Income Declaration Scheme (IDS) 2016. Under IDS which opened on June 1, black money holders can come clean by declaring the assets by September 30 and paying tax and penalty of 45 per thereafter. Those who fail to take advantage of the scheme will have to face stringent actions, including imprisonment.
The scheme promises immunity by exempting declared assets from Wealth Tax, scrutiny/enquiry and prosecution under Income-tax Act/Wealth-tax act, and immunity from Benami Transactions (Prohibition) Act, 1988.
Jaitley said with the implementation of GST, the ability to discover a direct tax income of the tax department will also increase. “Technology has become a big facilitator. therefore as we advance over the years not only is it morally, ethically correct to pay ones taxes, it is also safer to pay your taxes, “ he added.
The Finance Minister also said the IDS is not an immunity scheme and there will be no other compliance window for the domestic tax evaders after the IDS. “With each passing day the world is becoming more and more transparent .That iron curtain around the banking secrecy in tax havens is being demolished. The G-20 initiative, the impact of the FATCA law in the US, the co-operation between one country and another. Information is now available on a real time basis and cases have come to light,” said Jaitley urging people to use the IDS to declare undisclosed assets.
The Income Tax department has already identified 90 lakh high value transactions without PAN. As part of the scrutiny, the department will initially issue 7 lakh letters to those who have indulged in such transactions seeking their details.