prpri 4TH Year of GST regime: Taking proper shape 4TH Year of GST regime: Taking proper shape

The Goods and Service Tax was launched at midnight on 1 July 2017 by the President of India and the Government of India. The launch was marked by a historic midnight (30 June – 1 July) session of both the houses of parliament convened at the Central Hall of the Parliament. Now soon it will be completing 4th Anniversary. GST is to be considered as the biggest post-independence indirect-tax reformation in India as it has redesigned the whole concept of taxation. Being a techno-driven and consumption-based administration, it is completely transparent and convenient than the previous tax structures.

Previous tax regime was loaded with multiple taxes at the state as well as center level. Some of tax laws like Central Excise Act, 1944, Entertainment duty act, 1923, Public gambling Act, 1867 were originated/rolled out under British India Government. Obviously in those days the law makers are not gave much attention to ease of doing business or transparency in tax collation system etc. After Independence, Government has made lot of effort to modify the law but could not clear all the defect of existing tax law hence there was a need to complete reform in tax regime. Previous tax system was regressive tax regime  VAT is to be charged on Excise duty, Octroi is to be charged on Excise duty + VAT like was there was defect in the taxation system which needs to eliminate.

We must proud yourself that GST law is our own creation/invention. Obviously Law maker has taken almost care in drafting law which suit to our fiscal improvement. You would agree no improvement without change. Great Prime Minister of Britain Winston Churchill said “To improve is to change; to be prefect is to change often: History is the witness “any change is painful” hence change in tax regime is also painful process, gradually it will get settle down but we need to give substantial time to settle down to new tax regime.

Many experts criticize frequent amendment in GST Law. Yes, it is one side of coin. It is worthwhile to take review of GST Notification/Circular/Order issued by Central Board of Indirect Taxes and Custom, since inception of GST regime. Refer below table.

Particular 2017 2018 2019 2020 2021 Total
A] Notification
a) Central Tax 75 79 78 95 27 354
b) Central Tax (Rate) 47 30 29 5 5 116
c) Integrated Tax 12 4 4 61 3 84
d) Integrated Tax (Rate) 50 31 28 5 5 119
e) Union Territory 17 15 2 2 2 38
f) Union Territory  (Rate) 47 30 29 5 5 116
g) Compensation Cess 1 1 1 0 0 3
e) Compensation Cess (Rate) 7 2 3 0 0 12
B] Circular
a) Central Tax 26 55 49 14 4 148
b) Integrated Tax 2 1 1 0 0 4
c) Compensation Cess 1 0 0 0 0 1
d) Union Territory 0 0 0 0 0 0
C] Order
a) Central Tax 11 4 2 1 0 18
b) Union Territory 1 0 0 0 0 1
C] Removal of Difficulty Order
a) Central Tax 1 4 10 1 0 16
b) Union Territory 0 0 3 0 0 3
298 256 239 189 51 1033

You will notice there were average 21 number of Notification/Circular/Order issued by CBIC in a month. No doubt it is a challenge to keep track of these many notifications, circular, order etc. One has to read chain of notification from the latest one to the original notification to understand the amendment in total. Tax Consultants, Tax officer are keeping themselves updated to solve the query of clients/taxpayers. Such amendments or clarifications create problems for tax-payers as well as professionals. A small tax-payer cannot update them without engaging a Tax expert. Small taxpayer cannot afford this cost of engaging tax expert. Tax officer will also face problem at the time of audit due to frequent change.

On this background, we must see another side of coin; changes are always strengthen and purifying the law. Trade and Industry making presentation before authority, highlighting their practical issues. Many cases these suggestions are well taken by Government authority and accordingly amending law. You must have seen every month GST collection is reaching at new heights of tax collection. Experts envisioned once petroleum products come under GST net then we can visualize desire result of GST regime.

As would agree, Indian Constitution is one of big and largest constitution in the world and it governing biggest democracy of the world. Even then, since inception of constitution (26th January, 1950) it has been amended 104 time in a span of 71 year. Recent amendment 104th was taken place on 25th January 2020. It is sign of reaching its mature stage.  Indian constitution is of source of law in spite of that it has undergo change at 104 time means it has reached at most purified stage. We should look GST changes in same positive manner. We should give time to stabilized GST regime.

On the occasion of 4th anniversary of GST regime, we hope and pray soon GST regime will get a proper shape. We and our next generation will enjoy the fruit of GST regime

Author Bio

Qualification: LL.B / Advocate
Company: Worked in Big MNC'S
Location: Pune, Maharashtra, India
Member Since: 15 Dec 2019 | Total Posts: 2
A practicing lawyer with more than 25 years of corporate work experience in the field of indirect taxation. Member of All India Federation of Tax Practitioner, Western Maharashtra Tax Practitioners association, and member of Indirect tax panel of Chamber of Commerce and industries. View Full Profile

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