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Note: Read the full blog to be a part of India's Biggest GST Day Celebration in 2021
In 2000, the idea of implementing Goods and Services Tax (GST) was first suggested to India. The basic idea behind GST was to eliminate the system of multiple taxes and create a uniform tax for the nation.
It was, in 2000, when an Empowered Committee (EC) was formed by a group of state finance ministers to create a structure for GST and it was totally based on their experience in designing VAT. Then, it was requested to Centre & State representatives that they examine various aspects of the GST proposal and create reports on the thresholds, taxation of inter-state supplies, taxation of services and exemptions.
After this, the journey of GST in India went for 17 years and it was finally implemented on 1st July 2017 with four bills relating to it becoming an act. The implementation of GST in India is considered a historical move as it reformed the indirect taxation system in the country. Eliminating multiple taxes at a central and state level and implementing a single uniform tax had big advantages. One of the most important benefits was elimination of the cascading effect of taxation.
It’s been four years since the implementation of GST in India. After this implementation of uniform tax system, there have been many challenges for government, industries and consumers, due to so many changes & reforms. Some of these changes are simplifying procedures, restraining tax evasion, rationalizing rates.
At the same time GST played a vital role in developing the Indian economy. Now, Let’s look at some of the major impacts of GST in the past 4 years.
GST implementation transformed the Indian economy into a digital & standardized one, which helped in seamless flow of information and now a common data set was available to both the state & the centre govt. which made the collections of direct & indirect tax more effective.
Revenue collections after the implementation of GST were increased. This was identified when it was seen that revenue collection for FY 19 was INR. 11.7 lakh crores, compared to the revenue collection of first nine months of FY 18, which was INR. 7.4 lakh crores. This growth was considered a very healthy growth. In March, 2021 this collection was recorded to an amount of Rs. 1,23,902 crore, in March 2021.
Overall tax base of the country was also increased when it was seen that 38 lakh+ taxpayers migrated into tax regime. Within 2 months of its implementation, i.e. September, 2017, this number increased to more than 64 lakh and now in the present scenario this number has increased to more than 1.23 Crore. This is a clear indication that GST has impacted the growth of tax base in country.
Government of India continued to focus on the rationalization of GST rates and made several efforts to bring down GST rates for various products. In the recent times, 3 per cent of products are subjected to 28% GST, about 50 per cent of products are under 18% GST rate and 21 per cent products under 12% and 25 per cent products under 5% GST brackets.
Introduction of e-Way Bill was another most impactful decision under GST system. After the introduction of e-Way Bill, it became mandatory for all interstate and intrastate movement of goods to be registered on the e-Way Bill portal.
In the initial days, the struggles were seen which were related to technical glitches in the e-Way Bill System, but now, the e-Way Bill system is very stable and it is expected that it can handle a large number of e-Way Bills easily.
With almost 145 circulars, 700 notifications and over 30 orders, the GST law has gone through several changes as compared to it’s shape and form in 1st July, 2017. These changes have been made to carry out procedural simplifications, restrain tax invasions and to address taxpayer’s demands.
Introduction of e-Invoice system was another impactful decision made under GST, to reduce GST evasion. This system was first introduced on 1st October, 2020, which mandated e-Invoice generation for B2B businesses with 500 Cr.+ turnover, then, on 1st January, 2021 e-Invoice generation was mandated for B2B businesses with 100 Cr.+ turnover and then on 1st April, 2021, for B2B businesses with 50 Cr.+ turnover.
On 1st July, every year India celebrates it’s GST day, because on this day in 2017, GST was implemented in India and it totally reformed one of the biggest tax systems in the world with the agenda of “One Nation, One Tax”.
Want to know, how can GST impact the Indian economy in future? Then, we invite you to India’s Biggest Webinar on GST, on 1st July, 2021, where renowned speakers and industry leaders would analyse and discuss 4 years of GST and will predict what role it can play in Indian economy in the upcoming years. In this, webinar we have also organized a QnA session, where you can ask directly from industry leaders about things related to GST and how it will behave in future.
Visit the link to know more about the Webinar and to Register for FREE, visit >> https://bit.ly/GST-Day
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