prpri Four Years Journey of GST Four Years Journey of GST

Dear Friends,

Greeting of CA Day & GST Day

Today is 1st July and on this day in 2017 GST was introduced in India, that is why this day is also called as GST Day. This tax was introduced in order to eliminate the effect of tax on tax i.e. cascading effect, widen the tax base and increase the revenue of the government and give a simplified tax system to the taxpayers. Apart from this, providing input credit to the taxpayer without any hindrance and providing an automated tax system free from human intervention were also the stated objectives of GST.

The introduction of GST in India itself was biggest success of our political leadership because a very strong will was needed for introduction of such a big tax reform considering the size of our country and complexity of the existing indirect tax system.

The expectation of Government as far as the revenue part of this taxation is concerned it appears that the results are positive now and the government is not only getting the expected revenue from this tax but for the last 7 months the revenue from this tax has gone up to more than 1 lakh crore per month and the government has achieved this goal even during the Corona period. In April 2021 the revenue figures crossed the figure of 142 Lakh crores which is the highest from the introduction of GST in July 2017.

4 Years of GST

The tax base is also increased and at present there are 128 Lakhs dealers are registered under

GST and out of which 109.07 Lakh dealers are regular dealers and 16.67 Lakh dealers are composition dealers and rest are other dealers viz. TDS deductors, TCS Collectors and casual dealer etc.  and this number shows that there is a substantial increase in the number of tax payers in the GST regime as compared to  dealers registered in erstwhile indirect tax system.

Apart from this, another objective of GST is to eliminate the effect of “tax on tax” which is called the Cascading Effects andwe can also add to the success of this tax system.

One more thing is that multiple taxes in indirect tax system are subsumed in the New Goods and Service Tax system so cutting the several number of Taxes by introducing the GST is also achieved.

Simplification was one of the biggest expectations of the taxpayers regarding GST and GST has completely failed in this goal and the government has completely failed to give a simple tax system to the taxpayer and in these whole 4 years the taxpayers are facing this complex tax system. Troubled with the hard procedures and with this the initial failure of the GST network has added to the difficulties of taxpayers.

Story of GST Simplification

The story of GST simplification is that once they Promised a Simple Tax but introduced it with stringent procedures and Now their half-hearted efforts of simplification are making it More Complicated Taxation System.

From the side of the Law makers, this tax system has not stabilized yet. The initially difficult procedures of this tax, the continuing clarifications, notifications and circulars have made this tax and its procedures even more complicated to follow.

GST Late Fee and the poor system of GST Network has been troubling the taxpayers and professionals since the beginning, although the GST Network is working fine at this time but the problems have been there for a long time. The helpline of GST is also not able to provide any purposeful help to the Taxpayers.  The government should improve this with the help ofexperts working on ground Level so that the helpline can help the taxpayers in times of their need.

GST has a return GSTR 3B and taxpayers have been in trouble from the introduction of GST due to the lack of revision facility in it and still most of the problems of GST reconciliation are due to this reason. There is no bar on such revision facility in the GST law. A big question is here that why the facility is not provided even after supported by the Department. Is it a result of technical incompetency of the GST Network!!!! A big question is always asked by Taxpayers and professionals.

Seamless input credit has remained a dream in GST for taxpayers. If the seller collects the tax from his buyer, then it is his responsibility to deposit the tax to the government and if he does not deposit this tax, then the government should recover this tax from him but the easiest method which is adopted is to put the pressure on buyer, who has already paid the tax to the seller, by withholding the input credit of the buyer.  This system is not fair and the government should provide relief to the taxpayers by offering its alternative so that proper revenue is received to the Government and purchasers also get the justice.

In These four years the fate of GST is  swinging between success and failure and at the law makers front GST Revenue is gradually increasing  but it cannot be called the success of this tax system because in this whole 4 years period  the issue of simplification has not only become secondary but the ground reality is that in the meantime simplification has been completely forgotten and  now  government should take positive&concrete steps  very soon for simplification of the GST  and to solve the problems faced by  the taxpayer.

GST Reforms and Simplification of GST Procedures are need of the hour and  very much necessary for the success of the GST in India.

CA Sudhir Halakhandi

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July 2021