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Taxmen To Scrutinise Mismatch Between Returns Of Income Tax And Service Tax

The revenue department has asked tax officials to scrutinise the mismatch in turnover towards services between income tax returns and service tax returns by businesses during 2015-16 and 2016-17.

Central Board of Indirect Taxes and Customs Chairman PK Das in a letter said there was a considerable gap of Rs 12 lakh crore between the turnover on account of services as per the tax deductible at source data and the value of services declared in the corresponding service tax returns for fiscal 2015-16.

Mismatches were also noticed for the financial year 2016-17, for which data is being shared with the field offices.

"The sheer magnitude of the mismatch is a pointer to the possibility of revenue leakage which cannot be ignored," Das said, asking the tax officers to quickly verify the data and report it to the CBIC.

The mismatch in ITR and service tax returns has come to notice over permanent account numbers that are either not at registered under service tax or such numbers that were registered but didn't file the service tax returns.

In some cases, there is a value mismatch between the turnover declared in ITR or TDS and the service tax returns.

Service tax was subsumed into the goods and services tax with effect from July 1, 2017, and the period under scrutiny is the last two financial years before the new indirect tax regime was rolled out.

Net service tax collections during 2016-17 stood at Rs 2.54 lakh crore as compared with Rs 2.11 lakh crore in 2015-16.

Also read: GST Collection At Rs 1,06,577 Crore For February, Highest Since Tax Rollout