Govt looks to tap section of kirana stores to expand GST base: Report

By Nikunj Ohri

NEW DELHI (Reuters) - The Indian federal government is planning to widen its goods and services tax (GST) by tapping a section of mom-and-pop stores, a top tax official said on Thursday, as New Delhi looks to bring more elements of the economy into the tax net.

India has a large informal economy and the Narendra Modi administration has been trying to boost its tax revenues by including more of these activities.

The GST - which subsumed a host of state and federal levies when it was introduced in 2017 - requires businesses with an annual turnover of 4 million Indian rupees ($48,368) or more to be registered under the regime.

"We may adopt a sectoral approach in some sectors where we feel the taxpayer base is too slim compared to the size of the market," Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs, told Reuters in an interview.

The federal government is also working on a strategy with state governments and will seek their inputs to increase the base of indirect tax payers, said Johri.

The number of businesses within the GST net has increased to 14 million as of January 2023, from about 6 million in 2017, Johri said, seeing potential to further increase the taxpayer base under the GST regime.

One area is the business to consumer (B2C) space, he said, adding the government would use technology to target possible taxpayers without being unduly intrusive.

The government will tap private databases and data available with various government agencies as it looks to shore up the tax base, Johri said.

"These databases could include data of income taxpayers, property tax, commercial directories, power distribution companies, among others" said Johri.

($1 = 82.7000 Indian rupees)

 

(Reporting by Nikunj Ohri; Editing by David Holmes)