1 year of GST So Far So Okay
1st July marked the completion of the first year since the GST was implemented. ‘One nation one tax reform’ was the main agenda with which the GST was rolled out. Like all new policies, even GST had its fair share of difficulty in being accepted by individuals all over the country. While some looked up to GST with great expectations, there were some sectors which have not accepted the GST reform willingly. GST has impacted the diverse sectors in more than one ways. Some of the notable effects of GST in the first year are as follows:
Positives
• Inflation remained unchanged: As feared by most individuals, the rollout of GST would hike the inflation rate. Unlike other countries where the inflation spiked up after the introduction of a single tax reform, India did not face the same. High fuel and food costs have led to the recent consumer inflation which is unrelated to GST. The multi-slab structure of the GST which was quite vocally criticized across the country was kept with keeping the earlier tax structure in mind.
• One Tax Nationality: With the single tax implemented throughout the country, there is uniformity across the diverse regions. The production, distribution and supply have been streamlined to an efficient way.
• Formalization of the economy: Evasion has stopped due to digitalized process. The number of businesses registered with GST has crossed over 10 million and the number of income tax return filed has also seen a drastic increment.
• Win for All: As many as 17 taxes have submerged into the GST aligning India with the regime followed on the global platform. Cascading has been done away in the new single tax reform enabling free flow of tax credits. Reduction in complexities due to uniform law applicable all over the country.
Not So Positives
• Long way to Compliance: Compliance process was the biggest let down with the unresolved technical glitches that took way too long. The initial filing system was abandoned by the businesses due to struggle in compliance. A new process is under construction to overcome the hurdles faced in the previous one.
• Tedious Registrations: The tedious and long registration processes have become a major roadblock in the GST implementation. State wise registrations have led to the complexities due to multiple registration and individuals often face much difficulties in moving ahead.
• Emergence of new Cesses: While the original intention to bring in GST was to do away with the multiple taxes, luxury and sin goods have been imposed upon new taxes. A new cess levied on sugar is under scrutiny.
GST is facing has faced its share of acceptance and rejection. Most sectors have come into terms with this new tax reform and some are struggling to accept it. Slowly but steadily GST will definitely become a usual phenomenon.