One year after

One year after

News:

  1. Recently, the Goods and Services Tax(GST) has completed its first anniversary.

Important facts:

2. GST was launched on 1st July, 2017.

3. There are many implementation issues related to GST such as:

  • The IT functioning of the Goods and Service Tax Network (GSTN)has not been satisfactory.
  • The structure of the tax rate has led to complexity. With different tax slab categories, it has become difficult to classify goods and has further added to confusion among consumers.
  • Under anti-profiteering, businesses are required to pass on the benefits of reduction in tax rates and increase in input tax credit to any supply of goods and services.
  • Many goods and services are outside the ambit of GST such as electricity, alcohol, petroleum goods and real estate which further adds to the complexity and confusion over GST.
  • The E-Way Bill system had also faced a setback due to various technological issues

4. Despite above issues, the GST has taken firm root and is altering the economic landscape positively.

5. Entry of over 4.5 million entities in the country’s tax net is one aspect of positivity. This expansion of the tax net will further help in increase direct tax collections.

6. Finance Minister Piyush Goyal is confident that the average monthly collections this year could touch Rs 110,000 crore.

7. Way ahead:

  • The GST council must purse a time bound approach to execute plans already announced to ease taxpayer’s woes, such as e-wallet for exporter.
  • There must be road map to bring excluded products-petroleum, real estate, electricity, alcohol, into the GST net.

GST- A Brief Overview

  • GST is a single tax on the supply of goods and services
  • It is considered to be a destination based tax as it is applied on goods and services at the place where final/actual consumption happens
  • GST is applied to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas and alcohol for human consumption
  • There are four slabs for taxes for both goods and services- 5%, 12%, 18% and 28%. Although GST aimed at levying a uniform tax rate on all products and services, four different tax slabs were introduced because daily necessities could not be subject to the same rate as luxury items.
  • ‘Dual’ GST Model:
  1. Central GST (CGST) levied by Centre
  2. State GST (SGST) levied by State
  3. Integrated GST (IGST) –levied by Central Government on inter-State supply of goods and services.
  4. UTGST – Union territory GST, collected by union territory government
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