“The pain of parting is nothing to the joy of meeting again.”
– Charles Dickens
Touted as the biggest economic reform since India’s Independence in 1947, the Goods and Services Tax (GST), which was rolled out one year back with a symbolic ringing of the bell as a midnight session of the Indian Parliament on July 1 last year, has replaced the complex indirect tax system prevalent in the country with a more simplified, uniform regime. One year after, the government celebrated GST Day to mark the first anniversary of the launch of the new indirect taxation regime. Terming GST as a “fitting tribute to the spirit of cooperative federalism”, the Finance Ministry has claimed that the first year has been remarkable both for the sheer variety of challenges that its implementation had thrown up and for the willingness and ability of policy makers and tax administrators to rise up to these challenges and respond befittingly. Prime Minister Narendra Modi has claimed that the GST has within one year of its launch led to over 70% jump in indirect taxpayer base, demolished check-posts and merged 17 taxes and 23 cesses into one single tax. The reality is, confusion and anxiety prevail even after a year. It can be argued that while India has come a long way from a complicated taxation system, with over a dozen different taxes and many more cesses, GST is still far away from an ideal taxation regime.
The journey over the past one year has been a mixed bag. While the debate over how beneficial the tax regime has been to the country remains debatable, one cannot deny the fact that GST has had a significant impact on the economy as a whole. The new tax regime has successfully created a simplified tax regime, and from a macroeconomic perspective it is expected that our GDP – after a marginal reduction in the initial phase—will get a big boost due to the implementation. There is the e-way bill to ease transportation of goods, the tax net has grown, and more – courtesy GST. Revenue collections surpassed the Rs1 lakh crore-mark for the first time in April 2018. There is no denying that the GST has proved to be a hurdle for tax evaders.
There is still much to do for GST to be an unequivocal success. The simplification of GST as a step towards making compliance simpler is still some distance away and one expects decisions to this effect to move faster. Although it was anticipated that GST would reduce property prices pan-India, we have not seen such a significant impact on the ground. However, even almost a year after GST’s implementation, the only real clarity that exists for property buyers is on the prevailing GST rate of 12 per cent, on under-construction projects. A lot more has been expected from GST – ranging from easier tax return filing process and even lesser tax slabs for ease in compliance, and even taking a call on bringing petroleum products under the ambit of the unified tax regime. Glitches in the GSTN portal, cumbersome procedures and documentation, as well as the cost of compliance are the major areas of concern that need to be addressed to make GST a success.