GST Regime in India:
The Goods and Services Tax (GST) Regime in India was introduced with the idea of ‘One Nation One Tax’ by the government. It came into effect on 1st July, 2017 through the 101st amendment in the Constitution of India. It replaced multiple taxes that prevailed in India before like sales tax, Value Added Tax (VAT), excise duty, etc. There are five slabs of tax rates formulated under the Goods and Services Tax (GST) Regime in India. These are 0%, 5%, 12%, 18% and 28%. Certain products and services like petroleum, electricity, alcoholic beverages etc. are not included under the new GST scheme. There are three types of GST included in the new tax regime. These are namely; CGST- Central Goods and Services Tax, SGST- State Goods and Services Tax and IGST- Integrated Goods and Services Tax.
Need for GST Regime in India:
In country so diverse like India the indirect taxation schemes before were complex and complicated. To eradicate such a tax regime GST was introduced that succumbs 17 types of indirect taxes applicable before. It helped to remove multiple taxes, cascading, issues related to classification, any taxable events, etc. that were a hindrance for the taxpayers.
Benefits of GST Regime in India:
- No need to distinguish between the goods and services.
- Reduction of double taxation.
- Simpler taxation system
- Uniformity in prices throughout the country.
- Increases the opportunities of employability.
- Eliminates cascading.
- Develops a common market at the national level.
- Fewer taxation rates and exemptions.
Immediate measures to increase efficacy of GST Regime in India:
The GST Regime in India has made the taxation system better and more viable to the taxpayers. In a country so diversified like ours, there are still challenges faced by GST regime. Certain measures that can be applied or considered to make it even more taxpayer friendly and successful are-
- By expanding the base of the GST- The GST base needs to be expanded by getting in more and more goods and services like petroleum products, real estate, etc. to rationalize the tax rates for the consumer. Since the GST rates are quite high in India as compared to other countries, government must take a step for expanding the base areas in GST.
- By fixing the GSTN Portal-The GST Portal also called GSTN Portal was introduced to eradicate the face to face processes and making everything available online for the taxpayer. But with changes in the provisions over the time the portal has not been updated as per the requirements which are creating problems to the taxpayer. Making the portal up to date will give boost to the GST Regime in India.
- By bringing in electricity under the GST Regime- Electricity is one of the basic amenities for the consumer and still is out of the GST base, which is a major concern for the government to make it more viable by getting it under the uniform taxation laws. This can be really beneficial for the consumers as well as the manufacturers of the electricity sector.
- By making GST compliance much easier for the taxpayer- The government can eradicate the complexities faced by the taxpayer while filing returns or refunds. Instead of multiple registrations and more filing a simpler method needs to be introduced so that the taxpayer can understand better and be more compliant with the taxation laws.
- By getting more clarity in the GST procedures- We need more transparency in order to have compliance with the mandated GST laws. This can be achieved by getting more clarity in the guidelines and procedures and processes under the GST Regime by the government.