ANNIVERSARY OF GST ERA IN INDIA
The Goods and Services Tax Act, 2017 came into force in
India with effect from 1.7.2017.
The GST era completes one year
on 30.6.2018. The revenue collections
from July 2017 to May 2018 (June 2018 yet to be arrived) were given below:
Month
|
GST
Revenue
Collection
in Crores
|
Jul 2017
|
92,283
|
Aug 2017
|
93,590
|
Sep 2017
|
93,029
|
Oct 2017
|
95,131
|
Nov 2017
|
85,931
|
Dec 2017
|
86,703
|
Jan 2018
|
86,318
|
Feb 2018
|
85,174
|
Mar 2018
|
89,885
|
Apr 2018
|
1,03,458
|
May 2018
|
94,016
|
India is celebrating One Year of GST. The Press Release issued by the Central Government is given below for ready reference:
Press Rlease
dated 30.6.2018.
Subject: Celebrating 1st July as ‘
GST day’
Before implementation of Goods and Service Tax (GST), Indian taxation system was a
farrago of central, state and local area levies. In the constitutional scheme, taxation power on
goods was with Central Government but it was limited up to the stage
of manufacture and production while States had power to tax sale and
purchase of goods. Centre had the
exclusive power to tax services. This sort of division of taxing powers created a grey
zone
which led to legal disputes since determination of what constitutes a goods or
service became increasingly
difficult.
2. In the discussions that preceded amendment in the Constitution for GST, there were a
number of thorny issues that required resolution and agreement between Central Government and State Governments. Implementing a tax reform as vast as GST in a diverse country
like India required the
reconciliation of interests of various States with that of the Centre. Some
of these issues included origin-based versus destination-based taxation, rate structure and compensation, Dispute Settlement, inclusion of Alcohol and Petroleum products under GST. Resolution of
these issues took some time and finally, the Constitution (122nd Amendment) Bill, 2014 was introduced in the
Parliament on 19th December, 2014 and has been enacted as
Constitution (101st Amendment)
Act, 2016 w.e.f. 16th September, 2016.
3. As
provided for in Article 279A of the Constitution, the Goods and Services Tax
Council (the Council) was notified with effect from 12th September, 2016. The Council is comprised of the Union Finance
Minister (who is the Chairman of the Council), the Minister
of State (Revenue) and the State Finance/Taxation Ministers as members and is empowered to
make recommendations to the Union and the States on all GST related issues. The Council has
met for 27 times and no occasion has arisen so far that required voting to decide any matter.
All the decisions have been taken by consensus. This is a fitting tribute to the spirit of
cooperative federalism which has prevailed throughout all Centre-State interactions in relation to all aspects of GST.
4. Four Laws namely CGST Act, UTGST Act, IGST Act and GST (Compensation to States) Act were passed by the Parliament and since been notified on 12th April, 2017. All the other
States (except Jammu & Kashmir) and Union territories with legislature have passed their respective SGST Acts. The economic integration of India was completed on 8th July, 2017
when the State of
J&K also passed the SGST Act and the Central Government also
subsequently extended the CGST Act to J&K. On 22nd June, 2017, the first notification was
issued for GST and notified
certain sections under CGST Act. Since then, one
hundred and three notifications under CGST Act have been issued notifying sections, notifying
rules, amendment to rules
and for waiver of penalty,
etc. Thirteen, twentyeight
and one notifications
have also been issued under IGST Act, UTGST
Act
and GST (Compensation to States) Act
respectively. Further 59, 63, 59 and 8 rate related notifications each have been issued under the
CGST Act, IGST Act, UTGST Act and
GST (Compensation to States) Act respectively. Similar notifications have been issued by
all
the States under the respective SGST Act. Apart from the notifications, 53 circulars and 14 orders have also been issued by CBIC on various
subjects like proper officers,
ease of exports, and extension of last
dates for filling up various forms,
etc.
5. India has adopted dual GST model
because of its unique
federal nature. Under this
model, tax is levied concurrently by
the
Centre as well as the States on a common base, i.e. supply of goods or services or both. GST to be levied by the Centre would be called Central
GST (Central tax / CGST) and that to be levied by the States would be called State GST (State Tax / SGST). State GST (State Tax / SGST) would be called UTGST (Union territory
tax) in Union Territories without legislature. CGST & SGST / UTGST shall be levied on all taxable
intra-State supplies. Inter-State supply of goods or services shall be subjected to Integrated
GST (Integrated tax / IGST). The IGST model is a
unique contribution of India in the field of
VAT. The IGST Model envisages that Centre would levy IGST (Integrated Goods and Service Tax) which
would be CGST plus SGST on all inter-State supply of goods
or services or
both.
6. The introduction of e-way (electronic way) bill is a monumental shift from the earlier “Departmental Policing Model” to a “Self-Declaration Model”. It
envisages one e-way bill for
movement of the goods throughout the country, thereby
ensuring a hassle free movement of goods throughout the country. The e-way
bill
system has been introduced nation-wide for all
inter-State movement of goods with effect from
1st April, 2018.
As regards intra-State movement of gods, all States have notified e-way
bill
rules for intra-State supplies last being NCT of Delhi where it was introduced
w.e.f.
16th June, 2018.
7. GST
will have a multiplier effect on the economy
with benefits accruing to various
sectors such as exporters, small traders and entrepreneurs, agriculture and industry, common
consumers. GST has already promoted “Make in India” and has improved the “Ease of Doing
Business” in India. By subsuming more than a score of taxes under GST, the road to a harmonized
system
of indirect tax has been
paved making
India an economic union.
8. Any new change is accompanied by difficulties and problems at the outset. A change
as comprehensive as GST
is bound to pose certain challenges not only for the
government
but also for business community, tax administration and even common citizens of the country.
Some
of these challenges relate to the unfamiliarity with the new regime and
IT
systems, legal
challenges, return filing
and reconciliations,
passing on transition credit. Many of the processes
in the GST are new for small and medium enterprises in particular, who were not used to regular and
online filing of returns and
other formalities.
9. Based on the feedback received from businesses, consumers and taxpayers from across the country, attempt has been made to incorporate suggestions and reduce problems through
short-term as well as long-term solutions. National Anti-Profiteering Authority
has
initiated investigation into various complaints of anti-profiteering and has passed orders in some cases to protect consumer interest. To expedite sanction of refund, manual filing and processing
of refunds has been enabled. Clarificatory Circulars and notifications have been issued to guide field formations of CBIC and States in this
regard. The government has put in place an IT grievance redressal mechanism to address the difficulties faced by taxpayers owing to technical glitches
on the GST portal.
10. The introduction of GST is
truly a game changer for
Indian economy as it has replaced
multi-layered, complex indirect tax structure with a simple, transparent and technology–driven tax regime. It will integrate India into a single, common market by breaking barriers to inter-
State trade and commerce. By eliminating cascading of taxes and reducing transaction costs, it will
enhance ease of doing business in the country and provide an impetus to “Make in India” campaign.
GST will result in “ONE NATION,
ONE
TAX, ONE MARKET”.
11. Goods and Services Tax was launched on the 1st July, 2017 in a majestic ceremony held
in the Central Hall of Parliament on the midnight of 30th June, 2017. The first year
has
been remarkable both for the sheer variety of challenges that implementation of GST has thrown up and for the willingness and ability
of policy makers and tax administrators to rise up to these
challenges and respond befittingly. But more
importantly, the first year of GST has been an example to the
world of the readiness
of the Indian taxpayer to be a partner in this unprecedented reform of
Indian taxation. Accordingly, it has been decided
that Sunday, the
1st of
July, 2018 shall be commemorated
as “GST
Day”.
*****
