GST: A Step Forward to Becoming Good and Simple Tax
The biggest decision-making in the country's history is the largest indirect tax reform (GST) four months ago. From July, tax rates of more than hundreds goods and services has been reduced. In yesterdays Guwahati's meeting, GST council under the leadership of Assam's finance minister Himantha Bishva Sharma decided to remove some products under the 28% tax slab.
With the latest initiative, the 28 per cent range of 227 items have been reduced to fifty. It is true that in the past 28% tax slab includes 12.5 per cent central excise duty and 14.5 per cent VAT (value-added tax). The Guwahati seminar is set for the essential reform after Finance Minister Arun Jaitley commented four days ago that there are some goods and services in 28 percent of the tax rate, which are not applicable to the maximum tax rate.
As a result, it is estimated that the government's income may be reduced up to Rs 20,000 crore in the current financial year. Gradually all goods and services that are in 28% slab are to be included in 18% slab. Preparedness to restore the revenue loss to that extent is still far from impossible. In spite of the fact that the number of states requiring compensation from the center for revenue loss is increasing, Guwahati seminar is a crucial milestone in launching the ideological GST. This achievement would be helpful only when the net benefits reach to consumers!
GST's basic objective is establishing transparency in appraisal of indirect system and assessing indirect taxes and collections. There has been a long hint of classification of more than 12 hundred goods and five hundred types of services. The GST council, which enabled exceptions for minor and middle class merchants in the filing of the returns, curtailed federal inspiration for the consolidation of consensus among the various taxpayers.
Some States have argued that rationalization of some of the GST's highlights from fertilizers, tractors, and restaurants is a matter of rational reassessment. The same enthusiasm should be anticipated in keeping the micro-and medium-sized industries in mind with the impairment of the GST and assessment. There are arguments on the golden jewellery that wastage and the manufacturing charges are still in conflict with the uniform taxation principle as different taxes are collected in different states.
There is increasing criticism over invisible obstructions that consumers do not benefit from the reduction of essential commodity prices. In addition to the giant retail price (MRP), the GST is heavily exposed. Beyond tax exemption on certain goods, the borrowing of 12 per cent and 18 per cent of the merchants are bundled by customers. This is not going to stop even government providing exploitation of the extensive genetically-motivated programs on GST. There is a need to print the before and after GST prices on goods and show the difference between them. Wherever the violations take place, there is an immediate need to take action.
The proposal of the Subramanian Committee was 15-15.5 per cent when the GST was set up to replace tens of thousands of taxes, tariffs and surcharges. Including a series of exemptions and 5, 12, 18 and 28 percent in the GST, there are a total of 5 slabs after many considerations by GST council. The special tax serving on pan masala and cigarettes is different, gold jewellery was fixed for three percent. Alcohol, petroleum products and real estate are not in the range of GST. The GST has already done a good deal of reason for the 'good and simple tax' innovation of Prime Minister Modi.
Thinking that its not ideal to change tax slabs every time the UK have committed a rate of 20 per cent for six years and the tax collected in Australia is 10% from 17 years. Singapore stabilized the tax rate to seven per cent in 2007, increasing from 3% when it came to the GST in 1994. Most countries in the world use two or three rates to increase the collection of taxes. Contrary to this, there are a total of 5 slabs and the highest tax slab of 28 per cent is only in India. Arun Jaitley said that there is a possibility of GST to be implemented on real estate and petroleum products in 1 and 2 years respectively. For the unorganized sector workers, tourism and small scale marketers, the GST must become ultimate winner in the goal of making Bharat great!
© 2017 Lingutla giridhar