We Completed two years of GST era in India on 1st July 2019. Let us try to review what GST has been able to achieve in these two years and future of GST.
The aim of GST was to abolish or subsume multiple indirect taxes levied by Central & State Govt. into one Tax. To avoid ill effects of double taxation. That is why it was called One India One Tax. In these two years GST has gained acceptance and confidence in several sectors but with lot of criticism. Various amendments have been done for the benefit of the businesses. Multiple Notifications, FAQ’s and Clarifications have been issued by CBIC/GST Council, so that difficulties faced by business people can be looked into and necessary changes in the Act, Rules & Law were made.
Till now GST Council has conducted 35 meetings and the last meeting was chaired by our New Finance Minister Ms Nirmala Sitharaman. (Article 279A of the Constitution designates the Union Finance Minister as the Chairperson of the GST Council, not Chairman, probably thinking of future lady Finance Minister).
It was allowed to file the returns without late fee. In fact, date was extended multiple times to avail ITC for the previous regime of taxes. Govt. had changed the return forms from 3 forms to two forms GSTR1 & GSTR3B to be file monthly/quarterly. This was considered looking at the difficulties/challenges faced by businesses and also considering the views of professionals. RCM was removed from Oct 2017, again looking at the difficulties faced on this account except for RCM under sec 9(3). Clarifications came in regard to Job Work and lots of doubts were cleared. Rates of various goods and services have been brought down multiple times in last two years which has benefitted the industry and consumers. At present hardly there are a few products under the 28% category. Reduction in tax rate on restaurants from 18% to 5% without ITC. Reduction in under construction projects from 12% to 7% and 8 % to 1% for low cost housing projects, without ITC.
Composition scheme turnover was raised from Rs.50 Lakhs to seventy five lakhs and then further to Rs.1.50 crores so that small business could register itself under the Composition scheme. Business providing goods & services both were allowed to do interstate services up to Rs.20 lakhs without registration.
Increase in registration limits from Rs.20 lakhs to Rs.40 lakhs for goods. Allowing services to be registered under composition scheme with 6% tax. Exporters were given to submit documents physically enabling them to apply and get refund of taxes paid.
Such and many other initiatives were taken during this period of two years. E-way bill started in phased manner. Many webinars were conducted by GST in various languages enabling business people to understand GST is a better way. Filing of Annual return dates have been extended, as people were facing difficulty in understanding the return.
Now, further reforms are expected from 1st July 2019, registration process under GST by applying just with Aadhaar. National Anit-profiteering Committee has been extended for another two years. Electronic Invoices generation will start soon. New return formats have been launched- Sahaj & Sugam for different category of businesses. Sufficient time has been given for transition into new return. Single Cash Ledger for tax, interest, penalty etc. Appellate Tribunals at various State levels. Further merging of tax rate is expected in the current year.
I personally feel GST has been positive for India, of course with some hiccups but Govt. has always been supportive and has made necessary changes. Collections from GST have increased for most of the States and is likely to further increase in spite of reduction in tax rates.
Disclaimer: All views are personal and shall not be taken as opinion or statement of Law.