July 1st marks the fourth year of the Goods and Taxes Law implemented in India. It has helped to reduce taxes and increase the compliance of returns, says the finance ministry. In a series of tweets posted, the Ministry claimed that over 66 crores of tax returns were filed in the last 4 years.
Goods and Services Tax announced on July 1st, 2017, subsumed 17 state wise/local taxes including excise duty, service tax and VAT and 13 cesses.
The simplification of procedures and rationalising the rate structures makes GST easy for the common man. Under the system, businesses who have up to 40 lakhs turnover are exempted from taxes and those with a turnover of 1.5 crores can decide on the composition scheme and pay only 1% tax.
For services, Businesses with turnover up to 20 lakhs in a year are exempted from GST. Service providers up to the turnover of 50 lakhs can opt for the composition scheme in which they only have to pay 6% of tax.
GST significantly reduced the complexity of taxes in the country where the tax system was one of the most complicated ones in the world. A company looking for a business had to make as many as 495 different submissions but with GST, the number reduced to 12, showing how much the system streamlined the entire structure.
Multiple states in the country were having different rates of taxes, in which GST unified the rates to reduce the inefficiencies and made it unified. Along with that it’s also considered as a tax system that is both consumer and taxpayer friendly.
Though completed 4 years, GST is still in the early days of its experiments and there are continuous meetings and discussion with state and central governments regarding the implementation of the system.