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‘ All is Well ’ with GST
Sushil Kumar Modi
Aimed to boost revenue collection , GST Council to introduce a new system for filing returns . The new E-way bills will cure tax evasion .
Implementation of the good and services tax ( GST ) was an immensely difficult task in a vast country like India where different tax structures and VAT rates were prevailing in the 29 states andfive union territories . But it has delivered results better than our expectations . People have accepted GST . Whatever opposition or glitches they initially had are all gone . Earlier , during VAT days , only 30 per cent of filing was done online but now , everything – registration , return , payment – is being done online .
The GST Council consisted of people from different political parties and every state had its own issues . Still , all decisions were taken unanimously . There may have been political posturing by different parties outside but inside , everybody represented their respective states and concerns . That is why we found all the states , including Tamil Nadu and Kerala , on the same page . In fact , GST Council proved to be the best example of cooperative federalism .
There were different tax systems in different states . Bihar has entry tax while Maharasthra had octroi . Everything was integrated into one tax to remove the barriers and checkposts across the country .
It was a big achievement to put in place the onenation-one – tax system . Of course , there was some resistance , as it usually happens . It was mostly small traders who were affected by GST but now they are also used to it . In the past nine months , GST worth `94,000 crore has been collected . It is certainly a good beginning .
The coming year will be even better because of the new e-way billing system . You now need an e-way bill to carry any goods worth over `50,000 . It will go a long way in curing tax evasion .
Now , another system of filing returns is also coming
There is not a single item which has turned costlier under GST . We want to make it simpler . up . Until now , there was no mechanism to crosscheck the returns filed by traders and the government had to rely on whatever they declared . Maybe a decision will be taken in the next GST Council meeting on July 19 . It will further boost revenue collection . I am heading the IT committee and the number of complaints regarding the system is negligible . People are happy that they don ’ t have to go to the bank or run pillar to post to file returns . They can do it from their homes and shops .
As far as inclusion of petroleum products is concerned , there is no need to do so in a hurry . Let the system stabilise . As of now , the states have been getting 40 per cent of the revenues . What will happen to them ? Of course , under a constitutional amendment , petroleum products have been brought under the ambit of GST but the council has been empowered to finalise the date on which it would be done . Once the system stabilises , petroleum products have to come under GST . However , liquor will remain outside it .
There were some doubts about the success of GST in India . The example of Malaysia where GST was rolled back is often quoted . But then , every country has different circumstances . Malaysia had imposed a single GST rate but very few countries in the world have a single rate . Most of the countries have opted for three rates . In India , it is not possible to keep one rate for everything . How can there be a single rate for medicines , cars or air-conditioners ? Maybe we will gradually move towards abolition of the 28 per cent slab and keep three rates .
It is also not right that consumers have to pay more under GST than before . Of course , we have made frequent changes in the rates for the overall benefit of consumers . Maybe some people are not still passing on the benefits to consumers . The government will take action against them . In fact , there is not a single item which has turned costlier under GST . We want to make it simpler and people-friendly .
The Author is Deputy Chief Minister of Bihar and head of the panel on simplified GST filing . ( As told to Giridhar Jha )
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Outlook Money July 2018 www . outlookmoney . com