GST: Five years stronger

News: The Goods and Services Tax (GST) has completed its 5th year since its inception on 1 July 2017. Seventeen different laws were merged, and a single taxation system was brought in through the GST. It was first discussed in the report of the Kelkar Task Force on indirect taxes in 2003.

Must read: Goods and Services Tax at five: The new regime’s journey so far
What are the challenges the GST regime had to tackle before it came into force?

Several countries moved to the GST regime long before India did in 2017. But, the mechanism of the GST Council itself is unique to India. This is because,

-The quasi-federal nature of Indian polity wherein both the Centre and the states enjoyed independent powers of taxation demanded a unique solution.

-States of different sizes and at different stages of development with their legacy tax systems had to be brought together under the GST.

-States were also at different stages in the use of technology for revenue collection.

-The states never had the power to levy service taxes. States have been asking from the very beginning for the power to levy service tax, and not simply [get] a share of it. With GST that has been brought in.

For example, Half of state domestic product is services. GST is giving additional powers to the state in terms of service tax.

Must read: Analysis of GST regime in India – Explained, Pointwise
What is the performance of GST in past five years?

The GST Council has played a crucial role in forging a national consensus on key issues related to the tax regime — rates, exemptions, business processes and movement of input tax credit (ITC) etc.

Over 63.9 lakh taxpayers migrated into the GST in July 2017. This number has more than doubled to over 1.38 crore taxpayers as of June 2022.

Since the launch of the system, a total of 292 crore e-way bills have been generated of which 42% are for the interstate transport of goods.

Since its inception, the administration of GST continues to be IT-based and fully automated. The creation of GSTN, a professionally managed technology company to run the platform was a step in the right direction.

Most of the litigation on GST matters has centred around issues such as ITC, powers available to the GST officers on aspects of enforcement such as issuing of summons, arrest of persons and the attachment of property for recoveries. Recently, in Mohit Minerals vs UoI case the Supreme Court has not set aside or altered the fundamental features of GST.

Read more: The Supreme Court’s Judgment on GST – Explained, pointwise

Overall, GST proved to be both consumer and assessee friendly. Indeed GST has made India a single market.

Source: The post is based on the article “Goods and Services Tax at five: The new regime’s journey so far” published in “Indian Express” on 1st July 2022.

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