New Delhi, August 24
The Finance Ministry on Monday mentioned the GST regime has lowered the speed at which individuals should pay tax, helped enhance compliance and doubled the taxpayer base to 1.24 crore.
In a sequence of tweets on Monday, additionally the primary loss of life anniversary of former Finance Minister Arun Jaitley, the ministry mentioned earlier than items and companies tax (GST) was launched, the mix of value-added tax (VAT), excise, gross sales tax and their cascading impact resulted in excessive customary tax price of as much as 31 per cent.
“It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While the high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance,” the ministry mentioned.
The variety of assessees lined by the GST on the time of its inception was about 65 lakh. Now the assessee base exceeds 1.24 crore.
GST, which subsumed 17 native levies and 13 cesses, was rolled out on July 1, 2017. Jaitley held the finance portfolio within the first time period of the Modi authorities since 2014 and was the finance minister when the GST regime got here into drive.
“As we remember Arun Jaitley today, let us acknowledge the key role he played in the implementation of GST, which will go down in history as one of the most fundamental landmark reforms in Indian taxation,” the Ministry tweeted.
The a number of markets throughout India, with every state charging a distinct price of tax, led to very large inefficiencies and prices of compliance.
“GST has reduced the rate at which people have to pay tax. The revenue neutral rate as per the RNR (Revenue Neutral Rate) Committee was 15.3 per cent. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6 per cent,” the ministry mentioned.
Businesses with an annual turnover of as much as Rs 40 lakh are GST exempt. Initially, this restrict was Rs 20 lakh. Additionally, these with a turnover of as much as Rs 1.5 crore can go for the Composition Scheme and pay just one per cent tax.
For companies, companies with turnover of as much as Rs 20 lakh in a yr are GST exempt. A service supplier having turnover of as much as Rs 50 lakh in a yr can go for composition scheme for companies and pay solely 6 per cent tax.
“Once GST was implemented, the tax rate on a large number of items was brought down. As of now, the 28 per cent rate is almost solely restricted to sin and luxury items. Out of a total of about 230 items in the 28 per cent slab, about 200 items have been shifted to lower slabs,” the ministry mentioned.
In an article on the primary loss of life anniversary of Jaitley, Finance Minister Nirmala Sitharaman mentioned, “From midnight, July 1, 2017, the unimaginable happened — all of India became one market, interstate barriers disappeared, multiple taxes were subsumed to become one, double taxation was eliminated, the cascading effect of taxes got mitigated.” GST “ensured that there were no more queues of trucks and no more state barriers,” she wrote in Indian Express.
In the pre-GST period, the whole of VAT, excise, CST and their cascading impact led to 31 per cent as tax payable, on a median, for a shopper.
“Today, we have 480 items in the nil or 5 per cent tax rate, 221 items are at 12 per cent and 607 items in the 18 per cent rate. Only 29 items are in the 28 per cent tax rate,” she mentioned including the lack of income, due collectively to the discount in charges, has been greater than Rs 1 lakh crore yearly.
An evaluation by the Reserve Bank of India (RBI) observes that because the rollout of GST, the speed modifications have introduced down the GST incidence from 14 per cent to 11.6 per cent.
“The tax base has widened in the last three years. ….The average revenue collected per month for the nine months (July-March) in 2017-18 was Rs 89,700 crore. In the next year 2018-19, this per month average revenue collection rose by 10 per cent to Rs 97,100 crore.” “In FY 2019-20, the revenue per month was Rs 1,02,000 crore. This steady increase was despite the various concessions and rate reductions mentioned above,” she wrote.
In a tweet, the Office of Nirmala Sitharaman mentioned “In order to ease the GST compliance burden during the COVID-19 crisis, the government introduced several relaxations”.
Listing out the varied price discount and trade pleasant choices taken by the GST Council, the Ministry mentioned the housing sector has been positioned within the 5 per cent slab, whereas GST on inexpensive housing has been lowered to 1 per cent.
All processes in GST have been absolutely automated. Till now 50 crore returns have been filed on-line and 131 crore e-way payments generated, the Ministry added.
“The GST system allows the generation of e-waybills using several modes, to enhance taxpayer ease. 61.74 per cent of the e-waybills generated have been through the website, 21.55 per cent using the Excel tool, and the rest were through mobile, SMS & APIs,” the Minister’s workplace tweeted.
The Finance Ministry additional mentioned in gentle of COVID-19, taxpayers got sure compliance-related relaxations to ease their burden. Relief was offered by means of fee deferrals, lowered rate of interest, and waiver of late price/capping of late price to Rs 500 in sure instances, it mentioned.
For smaller taxpayers with an annual turnover of as much as Rs 5 crore, the speed of curiosity for late submitting of GSTR-3B returns was halved to 9 per cent if filed by September 30, 2020.
Also, the necessary requirement of submitting returns and assertion of outward provides utilizing digital signature was relaxed.
The Ministry mentioned tax price on common-use gadgets corresponding to hair oil, toothpaste, and cleaning soap got here down from 29.three per cent within the pre-GST period to 18 per cent below GST regime.
Also, home equipment corresponding to fridge, washer, vacuum cleaners, meals grinders & mixers, vegetable juice extractor, shavers, hair clippers, water heaters, hair dryers, electrical smoothing irons,TVs (as much as 32 inches) have all seen tax charges lowered from 31.three per cent to 18 per cent because of GST. PTI