Arun Jaitley:Demonetisation & GST to make cash dealings difficult,leads to widen tax bases

NEW DELHI: Finance Minister Arun Jaitley today said demonetisation and GST will make cash transactions a lot more difficult and lead to greater compliance as well as expansion of tax base.

Jaitley said the government has come out with laws to contain overseas black money as well as those dealing with domestic black money and cracking down on shell companies. The minister said the country had reconciled to an Indian normal, a very large number of tax non-compliance and very large amount of transaction which took place outside the system.

"Net impact of the demonetisation exercise coupled with the GST exercise, which is going to make generation of cash a lot more difficult, will certainly lead to greater compliance, greater digitisation. And the first signs of greater digitisation, expansion of the tax base of direct and indirect taxes is already visible," Jaitley said.

The amended benami property law, Jaitley said is "sending shiver down the spine" of those who conventionally used this methodology of round tripping of tax avoided money or corruption money and bringing it back into the system. Goods and Services Tax (GST), rolled out on July 1, is the biggest taxation reform since Independence and is expected to boost GDP growth and help tax evasion as every transaction in the value chain gets recorded digitally.

The demonetisation of 500 and 1000 rupee announced on November 8, 2016, has suck out over Rs 15 lakh crore worth old currencies from the system and move was aimed at cracking down on black money holders. Post demonetisation, the government has taken many steps to encourage digital transaction.