The biggest Tax reform of independent India has just completed half of its first birthday, but its journey was no less than a nightmare. It has already witnessed a number of speed breakers. GST has been a burning topic since its launch on 1st July 2017 and every 2nd individual calls himself a GST expert in India and they are willing to provide free advise at the cost of a cup of tea.
It has been a journey of 'chaos, confusion and clarification'. The inclusion of textile industry under GST was one of the difficult things to digest among various cloth merchants. The opposition capitalized the problems faced by the people and called GST as 'Gabbar Singh Tax'. The impact was such that BJP could have lost its biggest asset in the form of Gujarat but later Mani Shankar came to the rescue.
Ever since the launch of GST, It has been an era of confusion. For the general public initial issues comprised of Registration, Rate, Input Tax Credit, Return Filing, HSN/SCN code etc. There has been around 100s of notifications issued since the launch of GST but some matters still continue to be doubtful. However, not just the common people even the practicing professionals have faced a lot of challenges while working on GST portal and credit goes to GSTN. A meme got popular across social media regarding the manner in which professionals will charge fees from their clients, whether it is to be charged as 'wages or professional advise.'
Difficulties apart GST has brought huge business to tax professionals. GST has also made the entire process of Indirect taxes online and simple. Under GST, restrictions on inter-state movement of goods have been reduced which has resulted in increase in profits for businesses involved in the supply of goods through transportation.
Some of the major Amendments since the launch of GST are as under:
Introduction of GSTR 3B: GSTR-3B is a simple return form introduced by the CBEC initially for July 2017 to September 2017 but slowly it has been made compulsory upto March 2018. GSTR-3B has to be filed by 20th of next month. GSTR-3B contains details of outward and inward supplies. We do not have to provide invoice level information in this form. Only total values for each field have to be provided.
Changes in Composition Scheme: It started with a threshold limit of 75lacs, afterwards in the 22nd meeting of the GST Council it was decided to increase the threshold for composition scheme to Rs.1crore from the original Rs.75 lakh. The GST Council in its 23rd meeting in Guwahati has decided to increase the threshold for once again to Rs 1.5crore and also decided to amend the law to increase the statutory threshold to Rs.2crore.Now there is a uniform rate of 1% (0.5% Central tax plus 0.5% State tax) on composition scheme for dealers and manufacturers. Manufacturers under this scheme earlier paid 2% (1% Central tax plus 1% State tax) of the turnover.
Changes in Return Filing: As per the model GST law the GSTR-1, GSTR-2, and GSTR-3 forms had to be filed by the 10th, 15th, and 20th of the subsequent month, respectively. The GST Council decided to relax these deadlines for both small businesses as well as large enterprises, although in different ways for each. Assessee with a turnover of up to Rs 1.5 crore a year will now be able to file their GSTR-1 forms for each month in a quarterly manner. That is, the GSTR-1 forms for July to September are to now be filed by January 10, the October to December forms by February 15, 2018 and the January to March forms by April 30, 2018. Assessee with a turnover of Rs 1.5 crore or more a year can file their July to November forms by January 10. Thereafter, they will have to file monthly returns.
Changes in Rate Structure ('Some things to cheer about'): The GST council in its 23rd meeting held in Guwahati slashed down the rate on over 200 items, The Council pruned the list of items in the top 28 per cent Goods and Services Tax (GST) slab to just 50 from initial 228. GST on 13 items has been reduced to 12 % from 18 %. GST on 2 items has been brought into 12 % GST slab from 28 % bracket. 6 items have been brought into 5 % from 18 % slab. GST on 8 items has been cut to 5% from 18 %.Tax rate on six items has been lowered to zero from 5%.
Eating out in Restaurants got Cheaper: The GST Council in its 23rd meeting slashed down GST rates on restaurant bills from 18 per cent to 5 per cent and restaurants will not be eligible for any ITC. Only restaurants in starred hotels, that is who charge a tariff of Rs.7,500 or above for their rooms, will attract GST at 18 per cent. Outdoor catering will continue to be charged at 18 per cent GST and will be eligible for input tax credit.
Anti Profiteering Committee: The Government has approved the constitution of a National Anti-Profiteering Authority (NAA) ï¿½ the institutional mechanism under the GST law to check the unfair profit-making activities by the trading community. The Authorityï¿½s core function is to ensure that the benefits of reduction in Tax rates under GST made by the GST Council is passed on to the ultimate consumers by way of a reduction in prices by traders
E-Way Bill gets a nod: E-Way bill rules will be rolled out on a trial basis from 16th January 2018 and will be implemented from 1st February 2018. E-Way bill will improve the turnaround time of vehicles and help the logistics industry.
Some Experts say that the Government has launched GST in a haste without proper homework but we should understand that it has just been 6months. There is a long way to go. Every new change needs time to settle and same is the case with GST. Government is making constant efforts to make GST simple and easy to implement, so we should join hands with the Government and be a constructive critic in every step.