Finance Ministry Lists GST Achievements on first death anniversary of Shri Arun Jaitley
As we remember Shri Arun Jaitley today, let us acknowledge the key role he played in the implementation of GST, which will go down in history as one of the most fundamental landmark reforms in Indian taxation
Before GST, the combination of VAT, Excise, Central Sales Tax and the cascading effect of tax on tax resulted in the standard rate of tax being as high as 31% in many cases.
The multiple markets across India, with each state charging a different rate of tax, led to huge inefficiencies and costs of compliance. Under GST, compliance has been improving steadily. Taxpayer base has almost doubled to 1.24 crore
GST has reduced the rate at which people have to pay tax. The revenue neutral rate as per the RNR Committee was 15.3%. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6%.
It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While the high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance.
Some Achievements
1) Now, Businesses with an annual turnover of up to Rs 40 lakh are GST exempt. Initially, this limit was Rs 20 lakh. Additionally, those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1% tax.
2) Once GST was implemented, the tax rate on a large number of items was brought down. As of now, the 28% rate is almost solely restricted to sin and luxury items. Out of a total of about 230 items in the 28% slab, about 200 items have been shifted to lower slabs.
3) Significant relief has been extended to the construction sector, particularly the housing sector. It has now been placed at the 5% rate. GST on affordable housing has been reduced to 1%.
4) The taxpayer base has almost doubled since the roll out of GST. The numbers of assessee covered by the GST at the time of its inception were about 65 lakh. Now the assessee base exceeds 1.24 crore.
5) All process in GST have been fully automated. Till now 50 crore returns have been filed online and 131 cr e-way bill generated.
6) It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While the high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance.
7) let us acknowledge the key role he played in the implementation of GST, which will go down in history as one of the most fundamental landmark reforms in Indian taxation.
8) Before GST, the combination of VAT, Excise, Central Sales Tax and the cascading effect of tax on tax resulted in the standard rate of tax being as high as 31% in many cases.
9) The multiple markets across India, with each state charging a different rate of tax, led to huge inefficiencies and costs of compliance. Under GST, compliance has been improving steadily. Taxpayer base has almost doubled to 1.24 crore
10) GST has reduced the rate at which people have to pay tax. The revenue neutral rate as per the RNR Committee was 15.3%. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6%
11) The tax on cinema tickets, earlier anywhere between 35% to 110%, has been brought down to 12% and 18% in the GST regime.
12) Most items of daily use are in the zero or 5% slab. The construction of residential complexes saw a steep reduction in rates to 5% in general and 1% for affordable houses. Restaurants were also brought down to 5%
13) Common-use items such as hair oil, toothpaste, and soap have seen their tax rates come down from 29.3% in the pre-GST era to just 18% under GST.
14) Appliances such as fridges, washing machines, vacuum cleaners, food grinders & mixers, vegetable juice extractor, shavers, hair clippers, water heaters, hair dryers, electric smoothing irons, TVs (up to 32 inches) have all seen tax rates lowered from 31.3% to 18% due to GST
15) Substantial concessions have been extended to the agriculture sector in GST. On fertilisers, the net tax incidence was halved in GST. On agricultural machineries, the tax incidence has come down significantly from 15-18% to 12% and on certain items from about 8% to 5%.
16) The pre-GST tax incidence on chemical fertilisers was above 10%. (1% excise duty, 2.44% embedded excise duty, about 4% weighted average VAT and 2.5% CST, Octroi, etc.) while in the GST regime all types of chemical fertilisers only attract a 5% tax rate.
17) Cattle feed, aquatic feed and poultry feed have all been kept at a Nil rate in GST, as have all kinds of seeds. In other words, these vital inputs in the agricultural process do not attract any tax under the GST system.
18) With effect from FY 2019-20, the Composition Scheme was extended to suppliers of services (up to Rs.50 lakh turnover). Further, composition taxpayers were allowed to furnish returns on an annual basis only as against having to file quarterly returns as was the case earlier.
19) Addressing the issues faced by small taxpayers, the GST Council simplified the annual returns and filing was made optional for small taxpayers having turnover upto Rs. 2 crore for both 2017-18 and 2018-19
20) Filing of “Nil” GST returns through the SMS facility from the registered mobile number has been introduced which is expected to help almost 22 lakh Nil filers. A big step forward towards enhancing taxpayers’ convenience.
21) A total of 131 crore e-waybills have been generated since the launch of the system, of which about 40% are for the inter-state transport of goods.
22) The number of e-waybills generated has been growing steadily, with the highest single-day generation (25,19,208 e-waybills) taking place on 29.02.2020
23) For services, Businesses with turnover upto Rs 20 lakh in a year are GST exempt. A service provider having turnover upto Rs 50 lakh in a year can opt for composition scheme for services and pay only 6% tax.
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