The Punjab government has joined hands with USA-based Abdul Latif Jameel Poverty Action Lab (J-PAL) to work on ways to check tax evasion and improve the goods and services tax (GST) collection in the state.

The partnership between the state’s excise and taxation department and J-PAL, co-founded by Nobel laureate Abhijit Banerjee, is aimed at improving the state’s ability to tax effectively and work out a multi-pronged approach to the tax compliance problems being faced in the state. The project proposes to use machine learning to reduce the burden on tax officials in identifying tax evasion.

“Tax officials are currently able to identify tax evading firms after manually evaluation available information. The intent is to complement this approach by using big-data methods to help reduce the effort needed to find such firms and find more such firms,” according to J-PAL South Asia. The global research centre has already started putting in place its team for comprehensive data analysis using Python, machine learning modules and Stata (general-purpose statistical software package) with a professor from the University of California, Berkeley, heading the team.

Confirming the collaboration, Punjab excise and taxation commissioner Vivek Pratap Singh said the global research centre would analyse the GST collection data and suggest strategies for curbing tax evasion by identifying areas that require greater focus. “J-PAL also plans to develop a smart machine learning tool for curbing tax evasion. They will start working on the project soon,” he said, adding: “The Centre is also using modern technologies and sending a red flag report of areas of mismatch”.

Union finance minister Nirmala Sitharaman had on Saturday said the government was taking steps such as using data analytics to plug loopholes in the GST collection and prevent particular areas of misuse and gaming of the system.

Singh said the state’s GST collection was ₹1,340 crore in January 2020, up by 10% from ₹1,220 crore during the corresponding month of last year. Despite the 10% growth in the first three quarters as compared to the previous fiscal, tax revenues continue to be a worry for the Punjab government. The state has reported the highest shortfall of 44% in revenue collection among the major states against its assured GST revenue of ₹2,037 crore per month during the current financial year.

Under the new indirect tax regime, the states have been guaranteed a 14% year-on-year growth in their GST revenue over the financial year 2015-16 base. Though the state gets compensated by the central government for any shortfall — at times with some delay — from the cess fund, but this cushion is available only till 2022 as of now when the five-year transition period comes to an end.

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State’s share in central taxes up,

₹1,655cr gain likely in 2020-21

HT Correspondent

CHANDIGARH

Punjab is all set to gain from the increase in its share of central taxes in the financial year 2020-21.

The 15th Finance Commission, in its interim report for the coming financial year, has increased the state’s share of the divisible pool of central taxes to 1.788% from 1.577% that was applicable from 2016-20. The increase of 0.211 percentage points in share of central taxes could translate into increase of ₹1,655 crore from the central tax devolution, according to finance department sources.

In the budgetary estimates for 2020-21, the state’s share stands at ₹14,021 crore against ₹12,366 crore in case its percentage share had remained unchanged. Besides Punjab, Maharashtra, Bihar, Arunachal Pradesh, Meghalaya, Himachal Pradesh and Rajasthan are some other states whose share of central taxes has gone up.

The state’s share changed on the basis of the criteria and weight set by the 15th Finance Commission. As compared to the 14th Finance Commission, the present panel has reduced the weightage for income distance from 50% to 45% whereas there has been an increase for population (2011 census) from 10% to 15% this time. Demographic performance and tax effort have also been included in the criteria to reward states making efforts in controlling their population and having higher tax collection efficiency.

Published On : 09-02-2020

Source : Hindustan Times