Govt to integrate GST with PAN to curb tax evasion

The centre is planning to integrate GST with the permanent account number (PAN) issued by the income tax department for all persons and entities coming under indirect tax in a bid to tighten tax compliance.

This intended to curb tax malpractices as this would facilitate cross-checking income tax payments with GST payments.

The moves also would bring the GST-PAN linked system in line with the prevailing PAN-based system for income tax facilitating data exchange and taxpayer compliance.

GST will subsume all indirect taxes, including central excise and service tax, and the Central Board of Excise and Customs has given provisional registration numbers to indirect taxpayers.

Linking of GST number with PAN will help provide correlation between the payment of direct and indirect taxes and also within the tax authorities administering them, helping cross-checking easier, says tax officials.

They say linking Pan and GST number will prove advantageous as PAN has an all-India presence with a base of 240 million against 6.56 million registrations so far made on the GST network.

The revenue department had earlier proposed linking of GST and Aadhaar for the purpose, but it was dropped since Aadhaar would is issued to all citizens while the business identification number would be for all legal entities, including individuals, companies and partnership firms.

Although the industry has largely welcomed the move, experts say there would be a short term disruption on account of GST. It would take time for the entities to adjust to the new framework of input tax credit.