oppn parties Welcome Move To Seek Suggestions For Systemic Overhaul Of GST

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
oppn parties
Welcome Move To Seek Suggestions For Systemic Overhaul Of GST

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

The government has decided to set up a 12-member committee to suggest a complete overhaul of the GST system. This was long overdue. The GST was applied in haste when it was still work in progress. There were several flaws and shortcomings that crept in. Some major ones have been taken care of in the subsequent meetings of the GST Council, but other more serious ones have been discovered through the actual application of the tax regime over the years. These shortcomings have allowed unscrupulous businessmen to avoid compliance, evade taxes and even make use of the input tax benefit to commit serious fraud by raising false bills or use the inverted duty structure to pay less than due.

Hence, the decision to set up the committee is welcome. The committee needs to suggest a complete systemic overhaul of the GST regime through feedback from all the stakeholders. Since the GST has replaced a plethora of taxes, it has become the only source of revenue for both the Centre and the states, except for a few sectors. Hence, leakages have a serious effect on revenue generation and thus prevent governments from spending on nation-building.

The loopholes need to be plugged. Compliance needs to be improved by making the system simpler. Reporting has been made much simpler than it was when the system was introduced but if there is scope, it should be further simplified to ease the burden on small traders. Cross-platform tax structure (especially import duties) and rates need to be revisited to do away with the incentive to juggle bills provided by the difference in rates.

Although the system looks foolproof as both purchase and sales invoices need to be uploaded facilitating cross verification and easier detection of fraud, umpteen cases of taking undue benefit of input tax by raising false bills have come to light. The government has lost crores due to this. This is one area where the committee needs to suggest tighter monitoring through set procedures and red flags must be inbuilt in the system to detect such fraud.

No system can be absolutely foolproof as there always be ingenious minds who will find a loophole. But the system should be made so robust that such loopholes can be identified when the first person takes advantage of it and plugged before any serious leakage. That should be where the committee should apply its mind and come up with strong suggestions.