The government had so far kept compliance enforcement measures to larger firms, but the e-way bill restriction shows that after about three-and-a-half years of rolling out goods and services tax (GST), it is going for a full-fledged enforcement drive. These moves assume significance as tax evasion, especially among small businesses, distorts the industry, making defaulting firms more price competitive than firms that contribute to the exchequer. “The monthly tax return GSTR 3B shows transactions at the aggregate level based on which taxes are paid and hence two consecutive defaults point to non-compliance. After hand holding businesses in the transition period, the authorities now expect firms that are liable to pay taxes to file returns on time. Firms with less than Rs2 crore sales are exempt from filing annual return and those with sales up to Rs5 crore are exempt from filing GST audit report," explained Jain.

Source: Mint November 19, 2020 05:26 UTC