Page 12 - Banking Finance September 2018

GST UPDATE

GST

NEWS
NEWS
NEWS
NEWS
NEWS

GST Council clears 20% GST implementation quite successful
cashback on digital pay- Within one year of GST launch, 48 lakh enterprises have been added as com-
pared with 66 lakh enterprises registered in all
ments, with Rs. 100 cap these years since Independence. This may be at-
The Goods and Services Tax (GST) tributed to the simple procedures adopted un-
Council cleared der GST. An analysis in the 'Economic Survey'
a pilot project explains the reason for this phenomenal increase
to offer digital in indirect tax payers. Majority of the new reg-
incentives, in istrants come from the business-to-business (B2B) segment and small enterprises
the form of who have voluntarily chosen to register - although they could have opted out
cashback of because of their turnover - as they can seek to get the benefit of input tax credit.
20% of GST paid on business-to-con- This became possible because GST has integrated the entire value chain, from
sumer transactions using RuPay and raw material to retail.
BHIM platforms, subject to a cap of
Rs 100 per transaction. According to the Economic Survey, there is a 50 per cent increase in unique in-
direct tax payers under GST compared with the pre-GST system. This is a land-
Revenue shortfall concerns and issues mark achievement and proof that India is fast transforming from a tax non-com-
being faced by micro, small and me- pliant society to a tax-compliant one. The initial concerns were of course born
dium enterprises (MSMEs) dominated out of the roller-coaster nature of GST collections. But with Rs.1 lakh crore in
the 29th meeting of the GST Council. April 2018, those concerns have been finally put to rest.
The Council approved a six-member
ministerial panel, headed by Minister Most of the States have participated in this revenue gain and have almost re-
of State for Finance Shiv Pratap Shukla, tained their pre-GST revenue shares in the total tax revenue. States can im-
to look into the issues of MSMEs. prove their revenue collection if they build capacity in their commercial tax
departments by using advanced data analytics to identify leakages.
"We have decided to undertake a pi-
lot project. A broad framework has With GST, the intimidating task of complying with and paying around 17 differ-
been worked out so that users of ent taxes has now been reduced to a State GST and a Central GST. This effect
RuPay card, BHIM, Aadhaar, UPI, of the GST reform is a big deal for all businesses and consumers, especially small
USSD transactions can be given the businesses for whom the cost and effort of compliance with complex and often
incentives because these are mostly corruption ridden inter-State trade was intimidating and discouraging.
used by poor people," said former Fi- As Max Weber puts it, "Reform is the slow boring of hard boards." Most govern-
nance Minister Piyush Goyal, adding ments pushing reforms end up bearing the political costs upfront and early, with
that the pilot programme will be the benefits evolving over the medium term. That requires a certain determi-
implemented in any state on a vol- nation and belief in the political leadership and Modi has certainly delivered that
untary basis. despite all the petty political potshots of 'Gabbar Singh Tax', etc.

12 | 2018 | SEPTEMBER | BANKING FINANCE