Page 19 - NIS English 01-15 July,2023

6 Years of GST Cover Story

Benefits for Businesses Benefits for the government

n Black marketing has been stopped due to the system be-
n Earlier there were altogether 17 types of taxes. That's
ing online. If the total taxable, non-taxable, and exempted
why any businessman had to deal with 17 inspectors,
income of a businessman exceeds Rs 50 lakh annually,
17 returns, and 17 assessments. Besides, the tax rates
then it is mandatory to get online registration in GSTN. For
were very high. The normal rates of VAT and Central
businessmen from the states of North East India, this limit
Excise were 14.5% and 12.5% respectively. Not only this,
of income is Rs 20 lakh. However, the state governments
but CST was also levied on these, and eventually the
also have the flexibility to increase this limit.
tax rate reached 31 percent on most of the items. Got
freedom from Inspector Raj and toll collection. n Earlier the taxpayer had only two options, either to pay tax at
n All documents are online. With this, facts will not be higher rates or evade tax. At that time tax evasion was ram-
pant. Due to the process of GST, with the registration of every
distorted. In case of any mistake or loss of the doc-
trader, such traders have also been included in the tax chain,
ument, it can be corrected online. The businessman
who were left out earlier. This has increased the revenue.
has got freedom from frequently visiting government
offices. n While filing GST returns in the online system, receipts are
n Due to the reduction in tax, companies are making matched at every stage. Only then the businessman
can get the benefit of the tax credit deposited in the first
more cheap and more competitive goods. Indian
phase, due to which the possibility of tax evasion has been
goods are giving competition in the international
curbed.
market because now it is easy to do business due to
freedom from the cobweb of taxes. n Due to the different rates of the same item in different states,
some people used to smuggle them. Now the possibility of
n Businesses have to file the statement of sales for the
this has ended due to the same rate in the whole country.
month in the form of GSTR1 by the 11th of the following
month. However, businessmen with an annual turno- n Compensation Cess or GST Cess has been implemented
ver of less than Rs 1.5 crore do not have to file this re- for a period of 5 years to ensure that states do not lose
turn every month. They can file this return every quar- revenue from GST. It is imposed on Pan masala, tobacco
ter. Apart from this, an annual return has to be filed at or its products, coal, aerated water, and motor cars.
the end of the year. This entire process is online.

This halted the price rise. Items of common use were
taxed at zero or 5%. Returns and assessments went
online, and the army of inspectors disappeared. For
the first five years, states were guaranteed a 14%
increase in revenue.

Team India's best example
This form of taxation has been tested in a number
of countries around the world. Many factors had to
be considered when developing the Indian model.
Because India is a union of states, it is critical for
both the centre and the states to be fiscally and
financially strong. Because India is not a federation
of states, the revenue position of the states cannot
be strengthened at the expense of the central

New India Samachar July 1-15, 2023 17