It has been a year since the Goods and Services Tax (GST) has been implemented in the domain of Indian economy. Accept it or not, implementing the GST has indeed been a revolutionary one, especially in the segment of indirect taxation. At the 28th meeting of the GST Council, Union Finance Minister came up with 46 amendments which were cleared by the members of the GST Council. On July 1, 2017 – when GST was implemented, there were 226 goods in the 28% category. But, after a year, with the latest press release, only 35 goods remain within the 28% segment, the highest GST bracket. Many people are already terming it as middle class overhaul as household items like refrigerators, small televisions, of up to 25 inches, lithium ion batteries, vacuum cleaners, domestic electrical appliances, such as food grinders, mixers, storage water heaters, immersion heaters, hair dryers, hand driers, electric smoothing irons, among others have been brought to the 18 percent slab. Side by side tax rate on footwear, ethanol, kota stone, sand stone and similar quality of local stones were also reduced. It seems the middle class people are going to make more profit in the coming days with the next few amendments prior to the General Elections scheduled next year.
Interestingly, there are key changes which are to be viewed and analysed with their merits and demerits. The issue of rate rationalization has been addressed in the changes. Barring some goods and luxury items, the 28% slab has been trimmed to a great extent. More items have been exempted from tax itself and many items are now at 5% rate or 12% rate. This automatically implies that bulk of the items are either in the 12% slab or 18% slab. It won’t be an exaggeration to say that GST is slowly moving towards a two rate structure. On one hand, 28% slab can be abolished in coming days whereas introduction of 15% slab can be a reality.
For GST return filling, things are now much easier. Not only returns are to be filed every quarter through Sahaj and Sugam forms, but also, tax has to be paid every month like other assesses. To some extent, 93% taxpayers are under this category. The good thing is, taxpayers will need to turnover up to Rs 5 crore. As a whole, the whole structure of GST has become much easier. Not only one month returns are to be filed, but also, every return must have two tables namely outward supply and input credit claim.
Compliance costs are definitely going to be reduced and side by side, there won’t be delays. For hotel industry, GST is going to be charged on actual tariffs to customers. No more it would be necessary to rely on printed rate. Room costs are also going to decline as actual rates are to be considered. There is indeed a possibility that anti-profiteering bodies may become active. Altogether, with so many rate cuts, government can expect better revenue. No doubt, it has been a welcome move to abolish GST on sanitary napkins and one can expect the next amendments in the GST Council Meetings are going to be based on middle class, with more privileges.