IT Voice August 2018 Edition

Impact of GST after One Year

Its first anniversary of GST regime earlier it was nervouseness among the businessmen that it might not be the perfect single tax system but people as understand this system now its working.Yes still many issues are there to be addressed but the fact is the many problem have been resolved which give rise to confidence with this rising of self beleif remianing problem will be sorted out.

Inflation rate didn’t rise: GST, it was widely feared, would cause inflation to rise, as with many countries that launched a single tax regime. That hasn’t happened in India. The recent spike in consumer inflation has been due to high food and fuel prices, unrelated to GST. What helped? The much-criticised multi-slab structure. It ensured the levy was as close as possible to the existing rate, which meant the incidence of tax didn’t rise. The second factor was the anti-profiteering authority.Though the body was set up after the GST rollout, the prospect of its establishment was enough to ensure businesses did not abuse the 76ansition.

So by this some expected benefits was that GST would help to grow the formalisation of the economy.Evasion would stop making sense, thanks to transparent digital processes and incentive of input credit and invoice matching. With number of registrations crossing 10 million, it seems more businesses are signing up for GST.
With Single national market trucks queues on state borders has been disappeared & as checkpost were dismantled creating seamless national market. One tax nationally consumer in Kanyakumari now pays the same tax on an item as one in Jammu & Kashmir. GST has also allowed businesses to streamline distribution systems production, supply chain, storage to make them more efficient, having previously been forced to design them keeping state taxes in mind.More people filing income tax returns could also have something to do with GST.
Everyone wins: As many as 17 taxes and multiple cesses were subsumed into GST, aligning India with global regimes. Central taxes such as excise duty, services tax, countervailing duty and state taxes including value added tax, Oct roi and purchase tax were all rolled into one. The new regime provided for free flow of tax credits and did away with cascading due to tax on tax, boosting company financials and resulting in reduced prices for consumers. It also ensured a sole law for the country with uniform procedured and the rules, which reduce complinace burden and business complexity.

Compliance has miles to go: The biggest dampener was the compliance process, as information technology glitches took more than the anticipated time to be resolved. The filing system that was put in place in the beginning was quickly abandoned as businesses struggled with compliance. A new return form is being crafted to help make the process much less painful for businesses and is likely to be available soon.

Cumbersome registration system: Multiple registration requirements have complicated things for industry, which was expecting simplicity. In many cases, registration is required in all states. Companies fear that multiple audits and assessments due to multiple registrations could make life more difficult. Simplification and standardisation of compliance—a single return instead of two or three–to ease taxpayers’ burden should continue to be of prime importance for the government, especially with repeated deferment of compliance dates due to systems challenges and also the formats, which are too complicated for many micro, small and medium enterprises (MSMEs) considering small, medium businesses have a large share of registrations.
The government should bring down the slabs from four to three as collections have been above the mark and accordingly rate moderation should be warranted, encouraging certain sectors boosting the economy.Undoubtedly, GST has received positive as well as negative responses.

Tarun Taunk