Two years of One Nation One Tax. Has the GST’s promise delivered?
Exactly two years back on today’s date GST Act was launched, precisely on July 1, 2017. In the shape of one nation tax, GST has turned out as the biggest tax reform till date. During these two years, it has beaten the initial jitters and passes through a plethora of peaks & troughs. So, it certainly is call for the analysis to decipher about, whether it successfully has become ‘One nation, One tax system’ or not?
Let’s find it out on numerous grounds:
The Basic Agenda- One Nation, One Tax! Has it really achieved its motto?
By subsuming several indirect taxes prevailing in the country earlier, GST has appreciably integrated the entire nation under one umbrella, and has removed interstate & intrastate barriers with the easy flow of goods.
But this is equally true that in the face of fewer slabs, people are getting troubled with the burden of multiple taxes at higher rates. Now common consumption items come under tax bracket with higher rates. Besides this, several items like alcohol, petroleum products, etc. have been excluded which has considerably dropped the value of this system.
Has it passed the efficiency test?
GST has actually passed it in many regards. The removal of cascading effect and trouble to pay multiple taxes is sufficient proof of this fact. Besides this, now transparency has been hooked up with online software to file GST returns which has kicked out paperwork to a large extent.
Can it be considered as ‘Simple’?
Though GST was introduced with the purpose of simplifying the tax system, yet it has made it convoluted. This gets clear from the evidence that multiple changes have been introduced since its launch. The increased levy rates, cess have multiplied the tax burden on ultimate consumers.
Despite this, its complex structure subsumes several GST rates like 5, 12, 18, 28% rates. Many items you will notice, have no tax and many carry even least percentage of tax. It can’t be recognized as a simple tax as it has made tax levying so complex in nature that no-one has thought before.
What’s its impact on Government, Customers, and Businesses at large?
The impact is mostly favorable, such as consumers are enjoying low priced goods as tax rates are quite low compared with earlier rates. The most convenient interstate movement and easy tax compliance on online portals have provided greater ease to businesses.
The government is getting benefitted with high tax revenue with an increased number of taxpayers. The fully transparent system has abated the number of tax evasions.
But at the same time, complexities with too many rates, costly compliance with the law and unbalanced tax bracket excluding numerous businesses from tax, has made it mirage and not the real result driving law.
Does it ensure compliance with rules across the whole nation?
Well, yes! Across the entire nation, the simple movement of goods and lower tax rates have made it easy to comply with GST rules in the whole country. The online facility has made it even easier to file returns with great transparency with less paperwork which has eventually lower down the tax rates.
The Conclusion
From the above facts, it can be judged that GST has not evolved as ‘One Nation, One Tax’, instead there are countless loopholes that need to be filled with utmost care. But its benefits can’t also be overlooked in this perspective. Surely, it will take time to come in its actual shape to subsume all taxes under it and its long-run benefits will certainly outweigh all the negative aspects associated with it.
List of Best GST Service Providers?
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