Page 15 - NIS English 01-15 July,2023

GST Council: A unique example of a federal structure

n On 15 September 2016, the GST Council was constituted with the Union Finance
Minister as Chairman, the Union Minister of State in charge of Revenue or Fi-
nance, and the Minister in charge of Finance or Taxation or any other, nominat-
ed by each state government. In about six and a half months, the council met 18
times and made recommendations till it was launched on July 1, 2017.
n In this council, the center has 1/3 vote and the states will get 2/3 vote. A 3/4th
vote is required to pass any one decision.

n The 49th meeting of the GST Council has been held in February 2023, in which According to a survey
90%
keeping in mind the ease of doing business, apart from some recommenda-
tions, it has been recommended to reduce the GST rate on two items.

GST becomes a boon for MSMEs

For MSMEs, GST has created a unified market across the country and there is no
price variation due to uniform tax regimes across states. Because of this, the busi- Entrepreneurs agree that
ness is not affected. Simplified business processes without physical intervention GST has reduced barriers
and online tax payment and online refund processing for those with an annual and made it easier to do
turnover of up to Rs 5 crore. Because of this, most of the MSMEs have entered the business.
online platform. The growth in the MSME sector is clearly visible due to GST.
n The cost of goods and services
Increase in MSME taxpayers has come down.

n Companies have been helped in
In the year 2017-18, the number of MSME taxpayers was 15 lakhs, which in-
streamlining the supply system.
creased to 58 lakhs in 2021-22. Part of the reason for this is that the new tax
n Automation of tax compliance
regime is completely digital, which allows for end-to-end monitoring of tax
and e-invoicing facilities.
filings, leaving little loopholes for tax evaders.

significant tax reform that has promoted the ease
of doing business and brought the concept of Taxpayers increased
One Nation, One Tax to fruition. GST is the most
significant economic reform since the country's from 60 lakhs to about
independence, and it has had a positive impact on 1.40 crores in GST. The
the economy and all production factors. movement of goods has
GST is more than just a tax reform; it is the best increased. Refunds now
example of Sardar Patel's dream of 'Ek Bharat-
Shreshtha Bharat' coming true. That is why Prime come faster. The reduction
Minister Narendra Modi says, "Just as Sardar Patel in tax has given relief to
established India as the world's largest democracy the consumers.
by uniting more than 500 princely states, GST has
also economically integrated the country." Not only

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