Checking sales tax evasion: bill contains special documentation provision

A unique feature of the reformed general sales tax (RGST) is a special documentation provision of the GST Bill 2010 to bring all un-registered buyers/sellers, wholesalers, dealers, retailers and suppliers within the GST net for checking sales tax evasion, ultimately raising Tax-to-GDP ratio.
Sources told Business Recorder here on Thursday that the GST Bill 2010 has incorporated a documentation clause to bring un-registered suppliers into the tax net which would not only broaden the tax-base, but also increase revenue collection in 2010-2011. This policy measure has been introduced in the GST regime as a key documentation tool in the country.
The beauty of these documentation clauses is to expand the tax net by focusing on potential businessmen instead of registering the small and medium retailers/shop keepers etc. The NTNs/CNICs of all those operating within the supply chain would be obtained for registration of purchasers/sellers, who have avoided sales tax payments under the distorted Sales Tax Act, 1990.
According to section 52 of the GST Bill 2010, the registered person who makes a taxable supply to an unregistered person shall issue a sales receipt for the supply under the GST Bill. A sales receipt must contain the information prescribed by the Board, including but not limited to date on which it is issued; name and registration number of the supplier; a description of the goods or services supplied; the total amount payable for the supply; an indication that tax is included in the amount paid and the name and computerised national identity card number (CNIC) in case of individuals and national tax number (NTN) in case of other buyers.
Sources said that it is the biggest tool for documentation and structural reforms has been introduced under this provision of the GST Bill 2010. The manufactures would be bound under the new provision to give details of the un-registered buyers within the supply chain. The section 52 of the GST Bill 2010 would be used as a major reform measure to document the national economy.
Without causing any inflationary impact on the consumers, the GST Bill 2010 would document such buyers and sellers within the supply chain to ensure documentation of the potential persons. The GST Bill has been carefully drafted in such a manner that the documentation provisions would focus on potential persons to considerably expand the tax base in the country.