GST @ 4: the government counts more successes than failures

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More than 400 goods and 80 services have seen the goods and services tax (GST) cut in the first four years of the new indirect tax regime, the finance ministry said on Wednesday. Along with this, the weighted rate of the GST also fell below 12 percent.

India is entering its fifth year of TPS on Thursday after its introduction on July 1, 2017.

In a tweet, Prime Minister Narendra Modi said: “The GST has been a milestone in India’s economic landscape. This has reduced the number of taxes, the compliance burden, and the overall common man’s tax burden while dramatically increasing transparency, compliance, and overall collection. ”

In a series of tweets, the finance ministry highlighted the achievements over the four years. However, experts are calling for much more action, especially on the rationalization of tariffs.

Also Read: No GST On Exam Fees Charged By Central / States / NBE, According To CBIC

Speaking of the achievements, the ministry pointed out that the total levy (Central and States) on most items was around 31 percent. With the exception of approximately 28 products, all other items have a GST rate of 18 percent or less. Giving a few examples, he said everyday items such as hair oil, toothpaste and soap saw their tax rates drop to 18% from 29.3%.

Appliances such as refrigerators, washing machines, vacuum cleaners, choppers and mixers, razors, hair clippers, water heaters, hair dryers, electric hair straighteners, televisions (up to at 32 inches) all saw their tax rates drop to 18 percent from 31.3 percent. The tax on movie tickets – previously between 35 and 110 percent – has been reduced to 12 percent (where the ticket rate can reach 100) and 18 percent. Most items of everyday use are in the zero or 5 percent slab.

On the issue of compliance, a company only needs to make 12 submissions now compared to 495 submissions previously, the ministry said..

Shots

According to Parag Mehta, partner at NA Shah Associates, increasing the taxpayer base, introducing electronic invoice and electronic invoicing, increasing collection from year to year (ignoring the pandemic period), hogging various taxes , ie VAT, excise, service tax, etc., the rationalization of rates from time to time and the hassle-free movement of goods are among the major successes.

Mahesh Jaising, partner at Deloitte India, believes that one of the key transformations that can be attributed to the GST is the deployment of a technology-based tax ecosystem, most of the stages of a compliance and compliance lifecycle. examination being automated. According to Rajat Bose, partner at Shardul Amarchand Mangaldas & Co., the biggest change due to the introduction of the GST has been the use of technology to ensure compliance, generate consignment notes and issue invoices.

Failures

According to Mehta, the missing list for the future action plan, includes the delay in the implementation of the GST filing system, the continuous modifications and changes of the law, contradicting the advance ruling judgments, the unnecessary freezing of the credit. input tax, the delay in reimbursements, the applicability of the GST on inter-branch transactions, i.e. the cross-allocation of HS expenditure, the complex declaration filing process and the ambiguity over jurisdictions between the State and the Center. “In addition, four years have passed, however, petroleum products and alcohol are still outside the scope of the GST. It is high time that the same were included in the GST, ”he said.

Jaising added that the industry is not far in adopting technology for the GST, it may need to improve its game and focus on adopting the technology, not only to automate compliances, but also to effectively manage the data and information necessary to respond to requests for analysis from tax authorities. authorities. “CFOs / CEOs may need to play a larger role in enabling the adoption of compliance and data management technologies, even by their supplier / partner ecosystems, to avoid tax or credit leakage. any time, ”he said.


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