A year may not be enough to make to assess India’s Goods and Services Tax (GST) which kicked off on July 1 last year. But despite some loopholes, there are some positives the GST has brought along with it. One of the most crucial advantage that the new tax structure has brought is the rise in revenue. With GST collections rising to Rs 95,610 crore in June, the government is now looking forward to monthly average collections to Rs 1.10 lakh crore and revenues of over Rs 13 lakh in this financial year.
The commencement of the new uniform tax structure has also led to a number of businesses now becoming part of the tax net, and the creation of an audit trail, with 64.69 lakh assessees having filed their summary sales returns in June compared to 62.47 lakh returns a month ago.
Moreover, the time span for transportation of goods has also curtailed with fewer bottlenecks faced by goods transport on state borders.
None will deny that reduction in time for movement of goods from one state to the other may only strengthen the market sooner than later.
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However, there is no denying the fact that there are some hurdles the GST is yet to overcome.
One of the criticism that the GST is facing is the existence of multiple slab rates which Arun Jaitley recently defended by saying that India doesn’t have similar paying capabilities that of developed countries. The Prime Minister too said that single tax rate is not feasible as of now.
Besides, the issues of delays in input tax credits which is affecting many businesses especially businesses on the medium and small scale have also been a matter of concern.
Other opinions that has emerged among experts is that the government should do away with the 28% slab rate and merge the 12% and 18% slab rate into a single slab rate of 14%.
Also, the demand that has surfaced is the inclusion of real estate, electricity and alcohol under GST.
Moreover, the concerns of exporters who have been affected owing to inordinate delays in obtaining refunds cannot be overlooked by the government.
The need of the hour is simplification and stability of the new tax regime to bring forth economic efficiency and business friendly ecosystem.