What's New

GST regime has completed 4 years. Explain the highs and lows of this system and comment on the same.

Introduction:

Goods and Service Tax was introduced on 1^st July 2017. It subsumed almost all the indirect taxes except petroleum and alcohol. The GST was introduced for transparency and is known for its simple implementation. It is a system which is technology-driven. 

Body:

There are 4 types of GST

1)Central Goods and Services Tax(CGST)

2) State Goods and Services Tax(SGST)

3) Interstate Goods and Services Tax(IGST)

4) Union Territory Goods and Services Tax(UTGST)

GST council is the governing body of the GST. The Finance Minister is its head. It comprises of the finance ministers of all states. The implementation of GST and reviewing it along with making changes to the tax rates to the items is the responsibility of GST council.

States will be compensated by the centre based on the GST collection.

Achievements of GST regime:

1) Formalization of the economy

2) Lesser compliance works

3) Higher registration of the taxpayers

4) Improvement in ease of doing business

5) Increase in revenue collection

6) Reduction in fake billing

7) E-way billing system with removal of multiple checkpoints.

Areas of Concern:

1) Some production states are not suitably compensated

2) Technical glitches

3) Increased reliance on cess and other surcharges which is not under GST

4) Multiplicity of tax rates for some goods

5) Pandemic situation has resulted in not achieving wanted success

Conclusion:

Infusion of technology in areas such as taxation will always benefit the country due to the level of transparency it brings. There are some bypass roads to evade GST but it is less compared to the previous taxation systems. The continuous revision of items tax rates will help in not burdening the citizens.