GST completes 4 Years : What are its caveats? How much success it has gained?

By : Sabatini Chatterjee and Satyaki Paul

                On July 01, 2017 the Goods and Services Tax (GST) was implemented through the 101 Constitutional Amendment. The then Finance Minister was Shri Arun Jaitley. The date July 01, 2021 now has been designated by the Union Government as “GST Day”, which is celebrated every year to mark the roll-out of the historic tax reform.

Some of the merits of GST:

1. India’s tax base has almost doubled from 66.25 lakhs to 1.28 crores in the last four years. As per Finance Ministry, GST revenue collection in India has been over the Rs 100,000 crore mark for eight consecutive months in a row with as much as Rs 102,702 crore collected in May, 2021 alone. This is in the view of ongoing second wave of COVID19;
2. The GST Council has shown great foresight and wisdom in redressing legitimate concerns of taxpayers and citizens by course correction whenever needed. This is manifested in measures to reduce the compliance burden not only on the taxpayers, especially MSMEs, but also to reduce the tax burden on the common man;
3. The atma nirbhar bharat package 1.0 and the recent atma nirbhar package 2.0 was initiated with certain moratoriums. These might alleviate the economic situation in the ground level; and
4. Furthermore, the REAP project have reduced the compliance burden on the taxpayers to a great extent, making their lives simpler and better.

                Nonetheless, the benefits of GST have been obscured by the frequent issues faced by businesses. Further, the 15th Finance Commission, in its report, has also emphasized several areas of concern in the GST regime relating to multiplicity of tax rates, shortfall in GST collections regarding the GST forecast, high volatility in GST collections, inconsistency in filing of returns, dependence of States on the compensation from Centre, etc. This situation is further exacerbated by COVID19 lockdown induced economic contraction. Thus, it is imperative to note that certain structural level changes to the GST law may help boost the business and economy.

                For example: with oil prices are sky-rocketing in pan-Indian context, the legislators need to consider the inclusion of petroleum and related products within the GST slabs. Further, with a flood of litigations (PILs) pending to be decided and huge amounts of refund claims being disputed, it is vital to finally constitute the GST Appellate Tribunal as it is obvious that all taxpayers do not have the finances or means to approach the High Court for every practical difficulty faced. To counter such issues, it is very important to restructure anti-graft measures and simplification of compliance procedures also needs to be revisited to ensure that the cost efficiency and reduction in prices envisaged under GST lastly reaches the common man.

                In conclusion, we can say that GST envisioned the policy of “One Nation, One Tax”, but even after four years of its implementation it has four slabs i.e., 5%, 12%, 18% and 28%. Although this is a law which is a work-in-progress, nonetheless things should be simplified and more transparent to the public. So, that we can call it as Good and Simple Tax, rather than putting into the category of Tax Terrorism against the common man.                 

The first author works as a Research Assistant at the Cultural Research Institute, Kolkata under Backward Class Welfare Department, Government of West Bengal. And, the co-author works as a Ph.D. Research Scholar at the Department of Anthropology, University of Calcutta.