One year of GST: Even as India completes one full year after the implementation of the new indirect tax regime GST, a few changes to the law will have long-lasting benefits for the common man.
One year of GST: Even as India completes one full year after the implementation of the new indirect tax regime GST, a few changes to the law will have long-lasting benefits for the common man, say experts. Among the various changes suggested by industry insiders and analysts alike is doing away with the 28% bracket, bringing in petroleum products under GST, moving towards fewer tax rates in structure, simplification of compliance and robust checking on evasion. We take a closer look at these 5 changes to the GST which will be beneficial to the common man.
Bringing in petroleum, real-estate and electricity under GST
Many industry experts feel that bringing in petroleum, real-estate and electricity under the purview of GST will provide relief to the common by reduced prices of these essential commodities. “The government should actively consider inclusion of key sectors such as petroleum, alcohol and real estate within the ambit of GST to ensure free flow of credit through the supply chain. With these changes, GST can achieve its full potential and drive India’s growth to the next trajectory,” CII said in a note. Notably, Harsh Mariwala, Chairman of the Rs 44,000 crore FMCG giant Marico said that some new sectors, petroleum and real estate can come under the ambit of GST.
Doing away with 28% slab
Chief Economic Advisor Subramanian said in a recent event that doing away with the 28% bracket is the need of the hour. “I think the 28 per cent rate has to go. The cesses may have to remain, but there should be just one rate on cesses… Today, we have GST rates of zero, 3 per cent (for gold), 5 percent, 12 per cent, 18 per cent and 28 per cent. We need to rationalise but I think at the first instance the 28 percent should go,” Advisor Subramanian said. Sharing his thoughts about the future course of GST, Jaitley said that the government is working on shifting lot of items from 28% to lower tax brackets.
Fewer tax rates
While PM Modi has categorically said that ‘milk and mercedes’ cannot be taxed at the same rate, industry experts are calling for fewer tax rates. “With monsoon session around the corner, we are expecting some more relaxations in the GST rules making it more user friendly and promoting the business appetite of India,” Sanjay Agarwal, Partner, TASS Advisors said in a note to FE Online.
Simplification of compliance
While the indirect tax reform has come a long way in terms of improving tax compliance, experts say that a lot of processes can be further simplified. “Having GSTR 1 but no GSTR 2 is problematic both for the government as well as the taxpayer since compliance is not complete and confusion persists. The decisions for GST 2.0 have been taken and one is looking forward for its actualization so that the economic acceleration that GST is capable of can come alive,” Bharat Goenka, Managing Director, Tally Solutions told FE Online.
Check on evasion
For the complete benefits of GST to be realised, more checks and balances need to be put in place to ensure that there is no evasion. Following the e-way bill rollout, there were reports of unscrupulous traders using horse-carts for inter-state transfer of goods even above Rs 50,000 to evade taxes. These need to be curbed to ensure that the common man is not burdened any further.