Training drive reaches Mokokchung to help officials curb tax evasion
As per the state’s Budget for the financial year 2024-25, the Goods and Services Tax (GST) alone contributed Rs 1,224 crore to Nagaland’s tax revenue. GST continues to be the highest contributor to the state exchequer, yet according to Nagaland’s Commissioner of Taxes, Abhinav Shivam, the state is “not a frontrunner” in GST collection in average or per capita terms, adding that revenue leaks through evasion have severely affected the state’s share.
Tax Deduction at Source (TDS), a mechanism to collect taxes at the source of income, is applicable to departments and establishments of the central and state governments as well as local authorities. But lapses have been significant.
“Even though we are doing very well in tax compliance, we still need to do better. Around 99 departmental Drawing and Disbursing Officers (DDOs) failed to file returns between 2023 and 2025. Such lapses directly affect revenue collection,” Assistant Commissioner of State Taxes, Yanrenthung Yanthan, told Mokokchung Times on the sidelines of a one-day training on GST for DDOs, Dealers and Stakeholders held at Aotemulong Kilem in Mokokchung town on August 21.
Explaining how TDS filings ensure transparency, Yanthan noted, “When they don’t file the TDS returns, we don’t know how much money has been deducted and how much of the bill has been processed by the respective departments. Suppose the contractor has not filed and TDS has been deducted; it shows that the contractor is not filing the returns and this results in loss of revenue because revenue will come only after the contractors have filed the returns correctly.”
Once filed, every transaction becomes visible through GST 2A, an online dashboard. “We will get to know what the paid amount is, what the taxable value is, and from which department the contractors are getting funds. Every transaction we will come to know, but not if the TDS is not filed by the DDO,” Yanthan said, adding that this could even help reduce incomplete works as one indirect outcome.
He further revealed that Nagaland, along with Tripura, has introduced the Tax Clearance Certificate (TCC) system to curb tax evasion by unscrupulous contractors and suppliers. “TCC will be issued only after the tax clearance. It is needed to check loss of revenue and lack of accountability,” he said, calling for a “symbiotic relationship” between GST officials, DDOs, contractors, and suppliers.
Under the system, 2% will be deducted as TDS, while another 2% will be temporarily retained by DDOs until taxes are filed correctly. Contractors must then file their tax returns, apply for a TCC, and submit the TCC to the DDO. The GST department, after scrutinizing the tax return, will either issue or reject the TCC. Yanthan explained that this mechanism encourages timely filing while protecting state revenue.
He also reminded contractors and departments of the need to maintain proper “Books of Account” for 72 months, as proof of tax payments.
Assistant Commissioner of State Taxes, Mokokchung, Chubanaro who also holds additional charge of Tuensang, pointed to another challenge: contracts awarded to firms not registered in Nagaland. “Many departments provide TDS for those contractors that do not have registrations in Nagaland. If they don’t have registration, the return does not come to the state. The onus is now on the part of the department not to award contracts to dealers registered outside Nagaland unless they bring the certificate that we are registered here and also the TCC,” she said.
Chubanaro also sought to dispel misconceptions among contractors. “There’s also misconception among the contractors, why should we pay from our pocket? But this is not from their pocket; this is from the tax component given by the government. So, such awareness is needed.”
Both officials stressed that all GST revenue goes directly into the state exchequer. “Not even a single penny comes to the office. It will straight away go to the state. The department only monitors,” Chubanaro clarified, adding that personal communication channels such as WhatsApp groups are used to keep departments and dealers updated on amendments and other information.
Officials underlined that stronger compliance would not only boost Nagaland’s own revenue but also improve its share of financial devolution from the Finance Commission. As Yanthan put it, “The good thing about GST is that we have two parts – SGST and CGST. For SGST component, the state government will get the revenue and the taxpayer is also contributing to the Centre through CGST. The more it is increased, the more revenue is generated by the Centre, not only by the state. The public is also contributing to nation building.”
Takeaways from the GST Training
The training was organized by the Department of State Taxes, Nagaland with the aim to equip Drawing and Disbursing Officers (DDOs), registered dealers and other key stakeholders with practical knowledge of GST provisions, compliance requirements and recent updates.
Yanrenthung Yanthan, Asst Commissioner of State Taxes highlighted various aspects of GST including Tax Deduction at Source (TDS), registration and filing of returns for DDOs, payment, refund and offences under GST. Biju Sharma and Zeko Mero from IT Cell conducted a practical demo on TDS registration and returns filing.
Roselinda Longchar, Commercial State Taxes Officer, highlighted the importance of registration, returns filing and Input Tax Credit (ITC) for registered dealers under GST.
The programme witnessed active participation from DDOs, local dealers, business representatives and other stakeholders, who also engaged in an interactive session clarifying doubts related to GST.
The training concluded with a call for collective responsibility in strengthening the tax system and ensuring smooth functioning of GST in the state.
The training programme was chaired by Vikavi Z Assumi, Commercial State Taxes Office and welcome speech was delivered by I Mughato Aye, Deputy Commissioner of State Taxes Mokokchung.
