(GIST OF YOJANA) GST MEANS EASE OF DOING BUSINESS-October-2017


(GIST OF YOJANA) GST MEANS EASE OF DOING BUSINESS-October-2017


GST MEANS EASE OF DOING BUSINESS

After 17 of marathon journey of the most crucial tax reform in the country, entailing rounds of debates, discussions, meetings, consolations and disagreements, the goods and services tax (GST) came into effect in India on July 1, 2017. The journey started in 2000 during the Atal Bihar Vajpayee government with the setting up of a committee to suggest a GST model, followed by the formation of a task force under the chairmanship of Vijay Kelkar in 2003. There has been no looking back since then and the central government has been working consistently along with the state governments to ensure its earliest implementation.

Understanding the GST

GST is a destination-based single tax on the supply of goods and services from the manufacture to the consumer, which has replaced multiple indirect taxes levied by the Central and state governments, thereby converting the country into a unified market among other benefits, GST is expected to improve the ease of doing business in tax compliance, reduce the tax burden by eliminating tax-on-tax, improve tax administration, mitigate tax evasion, broaden the organized segment of the economy and boost tax revenues for the exchequer. It has also lowered the taxes paid for industrial products from an earlier average rate of 25-28 percent to 18 percent now.

GST seeks to replace 17 indirect taxes (8central + 9 state levels) and 23 Cesses of the Centre and states, eliminating the need for filing multiple returns and assessments and rationalizing the tax treatment of goods and services along the supply chain from producers to consumers. GST comprises of Central GST (CGST) and the state GST (SGST), subsuming levies previously charged by the Centre and state governments respectively.

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Easier Compliance

In the previous tax regime, businesses had to file several returns for multiple taxes, face multiple authorities and suffer long bureaucratic delays for assessment of different indirect taxes. GST, by merging all indirect taxes into one single tax, has made the compliance much easier for businesses. Using the IT platform of GST Network (GSTN), which is a shared IT infrastructure between the Centre and States, providing reliable and efficient IT backbone for the smooth functioning of the GST, taxpayers can register, file, make payments and claim refunds online at anytime from anywhere without having to interface with tax officials.

Single Interface for All

The GSTN provides a single interface to tax-payers with tax authorities and a single platform for resolving differences. With suppliers, buyers and tax authorities having access to all the relevant information, it will be easier to collate and match invoices. Besides, the input tax credit requires all invoices to be matched in order to avail credit, which automatically places the onus on buyers to ensure that suppliers file return and pay taxes on time.

In the previous tax regime, MSMEs with an annual turnover of Rupees 5 lakhs were required to register for VAT. In case of multi state operations, businesses had to comply with varied tax rates, rules and procedures, across states. This not only had high compliance burden on MSMEs but also forced many of them to hire professionals to assist in tax compliance. GSTbrings a uniform, online, fast and transparent tax administration across states, making compliance much easier and saving money cost as well. MSMEs also stand to benefit from the provision of input credit on taxes under GST, which would help them become more competitive.

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Courtesy: Yojana