Uttar Pradesh has launched a new initiative to broaden its Goods and Services Tax (GST) base by focusing on untapped sectors of the service industry. The move is expected to increase state revenues. Real estate, banking, insurance, advertising, restaurants, and e-commerce are among the key sectors under scrutiny.
The state intends to improve compliance and reduce tax evasion by appointing officials to oversee specific sectors and ensure that operations are audited for irregularities.
Nitin Bansal, Commissioner of State Tax, stated that the service sector has enormous potential for expanding the tax base in the state. "There could be a number of areas in the service sector that are currently not taxed for any reason. We are identifying such areas in order to bring them into the tax net," he added.
The transport department is expected to generate ₹300 crore in revenue from VIP vehicle registration number auctions, subject to an 18% GST levy. The state's tax department has already issued a notice to the transportation department clarifying that revenue from VIP number auctions is subject to GST.
M Devraj, principal secretary of state tax, explained that prior to the implementation of GST in 2017, the Centre collected taxes on services, and many state officers remain unfamiliar with the nuances of the service sector. To address this, joint commissioners have been appointed as nodal officers for sectors such as e-commerce and real estate, with the task of identifying potential tax leakages.
"While it is too early to comment on the possible additional revenue that could be tapped by targeting services, we understand the real estate alone may have the potential of generating a revenue of ₹300-400 crore annually," the representative said.
