How GST has simplified compliance for taxpayers? FM Sitharaman explains
how gst has simplified compliance for taxpayers? fm sitharaman explains
Indian Economy, GST Latest Update: Union Finance Minister Nirmala Sitharaman has hailed the implementation of Goods and Services Tax (GST). Sharing a post on her social media handle X (formerly Twitter), the finance minister said that the Revenue Neutral Rate was suggested to be 15.3 per cent but was lower at 14.4 per cent in 2017, and it has come down to 11.6 per cent in 2019. She further added the government has adopted a “pro-poor approach” while implementing Goods and Services Tax (GST) in the country.
GST Simplified Compliance for Taxpayers
In a post, the finance minister said that the GST has simplified compliance for taxpayers in the country. Compared to the pre-GST era, Sitharaman said that GST reduced the price of many essential items such as hair oil, electrical appliances, movie tickets, etc.
“Common items like hair oil and soaps saw tax cut from 28 per cent to 18 per cent. Electrical appliances taxed at 12 per cent v/s 31.5 per cent before. Movie tickets were taxed lower, too. Further tax rate rationalization has been done since 2017. National Anti-profiteering Authority ensured that companies passed the benefits to the consumers,” she added.
She further added that the government has exempted many essential items and services from GST. These include – life-saving drugs, healthcare, education, public transport, sanitary napkins, hearing aid parts, and agricultural services. Sitharaman said that GST has promote cooperative and fiscal federalism.
Pre-GST vs Post-GST era
In the pre-GST era, the taxpayers had to follow different laws and processes in each state. They also have to go through different return forms in every state. However, after the rolled out of GST, a taxpayer has to follow the same laws, processes, and forms in each state. The GST has also reduced 495 different submissions such as challan, declaration, form, requisition form, transit pass, worksheet, invoice format, etc across states to just 12.
GST first discussed during former PM Vajpayee’s term
The finance minister said the idea of GST was first mooted during the term of former Prime Minister Atal Bihari Vajpayee-led NDA government. In 10 years, UPA was unable to achieve political consensus on GST, she said, adding, “under the leadership of Prime Minister Narendra Modi, the necessary consensus was carefully built, and GST Acts were passed by Parliament in 2016”.
About GST
Goods and Services Tax or GST was introduced on July 1, 2017. The GST simplified the tax regime by subsuming 17 taxes and 13 cesses into a 5-tier structure. The turnover threshold for registration rose to Rs 40 lakh for goods and Rs 20 lakh for services (from Rs 5 lakh on average under VAT). GST also reduced 495 different submissions (challan, forms, declarations, etc) across states to just 12.
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