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

News Snippets

  • Calcutta HC says Cricket Association of Bengal is not liable to pay tax on advertisement inisde Eden Gardens cricket ground as it is not a 'public place' because it does not have unrestricted access for the general public
  • Supreme Court admits a plea from a child of a single OBC mother who had applied for an OBC certificate for her son
  • Supreme Court approves applying strict preventive detention laws for 'cybercriminals'
  • SBI likely to shift part of operations of its Global Market Unit from Kolkata to Mumbai
  • FM nirmala Sitharaman calls for a "structured, process-driven approach to compliance" and asks top I-T officials to speed up refunds and simplify processes
  • Marine insurance costs surge as the oil corridor in Strait of Homruz becomes risky due to war
  • Stocks weaken on Monday on global cues: sensex sheds 511 points to 81896 and Nifty 140 points to 24971
  • Former left-arm spinner Dilip Doshi dies in London at 77. He played for India in 33 Test matches and for Bengal in domestic tournaments
  • Pant becomes the only keeper to score two centuries in the same Test in England
  • England Test: Rishabh Pant hits his second ton and KL Rahul a classy century to put India on top, England need 350 runs on the last day, with the ptich showing signs of wear and tear
  • DGCA orders an audit of the entire aviation ecosystem in the wake of recent snags in many flights after the AI Dreamliner crash in Ahmedabad
  • 2 Pahalgam residents arrested by NIA for sheltering and aiding 3 terrorists who killed civilian tourists in pahalgam tell the agency that there were 3 LeT ultras from Pakistan that carried out the attack
  • India unlikely to agree to US demands for lower tariffs on agri products and GM food, trade deal faces fresh hurdles
  • Stocks likely to plummet today as traders will be worried about the effect of US strike on iran, oil price rise and possible inflation. Foreign funds may also withdraw in the volatile global situation
  • Oil prices likely to shoot up as US strikes at iran and the latter decides to close the Strait of Homruz
US President Donald Trump unilaterally announces a 'ceasefire' between Israel & Iran
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.