GST Rises
Many might be unaware, but the idea of implementing GST in India was introduced under the leadership of the Late Shri Atal Bihari Vajpayee. He appointed an Empowered Committee(EC) in the year 2000, and the committee was tasked with drafting the GST laws. Their and several other’s efforts combined finally came to fruition in the year 2017 with the adoption of the Good and Services Tax(GST) Act, 2017. Following the 1st of July, 2017, GST has been in full operation and it seems to have restored order to the taxation system in India.
GST is basically an indirect tax replacing most of the indirect taxes that are levied in various stages of production of goods and services. In this way, GST becomes an indirect tax for the whole country. GST basically aims at removing the cascading effect of taxes. Cascading effect is basically the additions and accumulation of taxes at each level of production of a good/service.
GST Revenue and Surrounding issues
The government has gone as far as to say that there has been a voluntary compliance and great response to GST after it’s initial stages leading to a rise in the tax base from 60 lakh Crores to 1.10 crore Crore rupees. This sounds great for the government but only on paper. The tax base increase can be accredited to the inclusion of many sectors in GST who were previously excluded.GST integration and application has surely helped taxpayers with filing their taxes and smoother compliances.
Present numbers, however, paint a picture of grim reality and realization for the government. The government had offered to provide compensation for 5 years because of the losses incurred by state government due to the implementation of GST, a good move by the central Government helping state governments consolidate the law till the grass root levels.
However, recent realizations and evaluations have left the Central government dissatisfied with the low revenue figures of the GST regime. The bi-monthly compensation for the months of June and July 2018, rose to as much as 3.8 times of that for the months of March and April 2018. the central government is also constantly falling short of their set target of 1lakh crore. The government, however, present a strong front and claim that they have eliminated implementation errors and are also “better equipped to deal with defaulters” which sounds like a hollow statement considering current events. In this regard, the Central Government is formulating strategies and hoping state governments will help identify flaws within the current system.
THE STEPS OF RECOVERY
The PTI(Press Trust of India) also was told by a high-ranking official that the government needs to devise a strategy to shore up the GST revenue. The source also bemoans at a lack of a set pattern for paying the compensation to individual states.
The government, however, isn’t just sitting quietly and watch as they fail to gather appropriate revenue. GST Return is set to undergo radical changes in the coming times.
Here are some of the reforms government are planning:
· Deploying anti-invasion measures with a focus on top 30 taxpayers. Data Analytics will be used to profile top 30 taxpayers and look at their tax payments before and after the implementation of GST
· Assuring businesses of all kinds that they would try to put a curb on being intrusive with businesses
· Reforming the current 5 slabs of GST to cut down slabs to just two.
Source by Rahul Jain
