GST was implemented to overcome various problems with the existed tax system that was running for long time in the country and there were a larger number of professional and tax authority was also much familiar and having expertise in this field, even the process was less digital but the taxpayer and authority was having command on the procedural aspect of the taxation.
One of the biggest loss here is that GST is new to us and GST Authority itself are not enough competent to overcome the obstacle taxpayer facing and there is also lack of professional in the market to advise the clients how to interpret the specific law of GST and save itself from legal action that can be taken by the govt. against the taxpayers.
Since the GST has widen its base by around 85% which is covering the SMEs located in backward areas and rural side and they don’t want to comply the provision in the hope that compliances will increase their cost and burden. They are not hiring the qualified professional for compliances which is resulting in more errors in their return and leading to cancelation of registration.
The main motto of GST launching was to eliminate the multiple procedures and multiple tax structure from the economy but the same problems still existed in the new system. There is multitude of tax rate ranging 5%, 12%, 18% and 28% and requiring multiple procedure and multiple compliances to be adhered to which is not a sign of smoothening the business process in India. International Monetary Fund (IMF) has also advised the govt. to simplify the GST process to smoothen the business.
In GST regime most of the products which are of necessary use for public at large are covered under 18% tax slab which is resulted in reduction of price because in pre GST regime there were multiple taxes imposed reaching up to 32% around. Other tax slab is 28% which is covering luxury and sin goods and is the great source of revenue for the govt.
Out of total state in India around 14 state showing increases in their revenue as compared to pre GST regime and there is no need to fill the revenue gap by the central govt. to state govt. Further there are a no of weakness in the GST system from which taxpayer struggling alike return filing and reconciliation system of GSTN Network.
We can conclude that at present there are various issues with GST but the govt. is seeing bright future ahead. Government is trying to simply the GST to overcome the present issue and to exhibit the belief of taxpayer on the new GST system.
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