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Budget 2024: The impact of simplifying GST compliance on tax collection is visible, the government can take this decision in the budget.

Sagar Patel

By Sagar Patel

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Government wins with GST

GST compliance, which was introduced seven years ago, has been simplified considerably, the effect of which is being seen in the rise in tax collections and revenues of states. However, fake invoices and erroneous registration continue to be a cause of concern. Let us tell you that the turnover limit for registration under GST has been made Rs 40 lakh for goods and Rs 20 lakh for services.

This limit under VAT crossed Rs 5 lakh on an average, GST also reduced 495 different submissions (invoices, forms, returns, etc.) across states to just 12, the number of registered taxpayers in seven years increased to 65 lakh in 2017. The average monthly GST revenue has increased from around Rs 90,000 crore in 2017-18 to around Rs 1.90 lakh crore in 2024-25.

What do the numbers say?

According to government data, GST has increased the tax incidence from 0.72 (pre-GST) to 1.22 (2018-23), despite the end of equalisation, the tax incidence of states stands at 1.15, without GST in FY18. The revenue of states from FY19 to FY23-24 would have been Rs 37.5 lakh crore, after GST, actual revenue of states was Rs 46.56 lakh crore.

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GST rate decreased

There has been a steady decline in the weighted average rate of GST in force since 2017 and the GST has reduced taxes on many commodities compared to pre-GST, reducing taxes on common products such as hair oils and soaps from 28 percent. at 18 percent. The tax on electrical appliances was reduced from 31.5 percent to 12 percent. The GST has exempted many essential goods and services such as unbranded food items, some life-saving medicines, healthcare, education, public transport, sanitary napkins, hearing aid spare parts, agricultural services, etc.

The government faces losses here

On the other hand, tax evaders are finding new ways to defraud the exchequer, tax officials are grappling with incidents of fabrication of fake invoices and fake GST registrations. In the year 2023, the Directorate of GST Intelligence (DGGI) has collected Rs 1.98 lakh crore tax evasion detected over Rs 100 crore and arrested 140 conspirators involved in defrauding the exchequer, significant GST evasion was detected in various sectors like online gaming, casinos, insurance and secondment (import of manpower services).

The establishment of the GST Appellate Tribunal is expected to make the dispute resolution process easier and faster for the industry, said Ranjit Kumar Aggarwal, president of the Institute of Chartered Accountants of India (ICAI), which is tasked with training over 6,800 officials in various government departments. This is being done in order to promote a transparent indirect tax system.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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