5 Big years of GST

Goods and Services tax known as GST now is 5 years old any day. Since being introduced on 1st July 2017, it has not only revolutionized the way the indirect taxes were being collected by the government but also streamlined various difficulties being faced in the earlier tax regimes.

We can definitely see that over 5 years it has grown drastically. It’s always good to see a council of just 33 members being able to coupe up with the need of an hour.

GST council on the other hand has already met for 48 times since 2017 and in every meeting, we could see the changes and amendments in various aspect of GST. Be it about GST Rates, GST rules and regulations, applicability, GST returns, reporting requirements and various other aspect.

The revenue collection has always been a talk of the town. We could see the massive gross GST revenue collection of Rs 1,49,507 crore, of which CGST is Rs 26,711 crore, SGST is Rs 33,357 crore, IGST is Rs 78,434 crore (including Rs 40,263 crore collected on import of goods) and Cess is Rs 11,005 crore (including Rs 850 crore collected on import of goods) during December 2022. (Source- PIB India)

If we talk about the positive aspect of GST, it has not only created an ease of doing business for the larger companies but also prevented general consumers from a many concealed taxes which were incorporated in the very complicated tax regime earlier.

It in one hand has created a transparency in the taxation system and in another hand has also promoted the digital awareness to the majority of consumers.

However, I still believe it to be a truncated taxation system which has items (Specially Liquor) outside it which yielded almost 50% of the total indirect tax collection to the Centre excluding custom duties in the financial year 2021-22.

Although it was supposed to be a master stroke, but since the inception of GST, there have emerged issues which are yet to be addressed:

• Compensation to the state by Centre is something which is yet to be addressed properly.
• There are multiple technical glitches even now which has not only created difficulties in filing GST returns but also in generating E-way bills. The IT system which we call as GST Network has gone through multiples down times through-out this period specially on the due dates.
• It has highly impacted the small and medium scales businesses which deals with large payment cycles as they have to furnish the tax even if it not being collected from their customers.
• Unlike earlier tax regime, there is no option to revise any returns if there are clerical errors not identified.
• There are cases of various litigations imposed on the tax payer without a strong proof of the non-compliance. There are huge numbers of litigations and uneasiness ?yet to be address at various courts and arbitrations.

We can see the big room for improvement still to be made. A big question comes regarding the path for the further journey. It is observed that wherever GST has been implemented, it has definitely taken a year or a two to completely settle down. We hope this to be properly settle down in India as well.

My recommendation

It will be a wise step to establish a united committee containing respective persons from centre as well as states. This would not only resolve the difficulties and tax war between centre and state but would provide an assistance for addressing the issues faced by the consumers of multiple states.