GST will turn five since its execution in India. The first half-decade of this platform is wrapped in the ups and downs with numerous hurdles.
At the current time, India has seen revisions in the effective tax rate as well as rectified supply chain efficiencies. Tax compliance is seen on a technology-based monitoring system via e-returns, e-invoices, and GST e-way bills would be one of the achievements of the GST system in India. It is also to appreciate the success of the centre-state partnership beneath the GST officials which has assured that all the decisions of the policies are executed all over the state.
GST execution is admirable, now the government is needed to reveal the challenges which the business community on the larger side suffering from the restricted working capital to the duplicity of assessment proceedings.
Major 5 Topic for User-Friendly GST Systems
These mentioned below are the 5 areas that can be examined to optimise the GST efficiencies that can make the GST 2.0 system easier.
Improvisation of GST ITC Platform with No Restriction of Working Capital
Various sectors are loaded with ITC owing to various factors along with the availability of credit attributable to input services to the traders, seasonal businesses, long gestation periods, inverted duty structure, and others. Recommendations that can assist this working capital from getting blocked, can be for the Central GST (CGST) pool made fungible all over the states. The companies who have a central GST balance in one state must have the capability to use the counterweight in another state.
The other method that the government can recognize is permitting the conversion of the accumulated GST ITC into the tradeable scrips in the market. The same shall assist in releasing the working capital and mobilizing unproductive assets in the financial statements of businesses.
The group firms that have numerous registrations all over the state sometimes suffer from the problems of the accumulation of credit in one state and cash outflow in another state owing to their business structure. This shall assist when the credit in the entities in a group can be made fungible to support helping the working capital and rectify the cash flows.
Ease and Rationalizing of GST ITC
GST continues to carry vestiges of the erstwhile regime in terms of credit restrictions. GST laws secure some limitations on the construction of immovable property, even though these expenses are made for the taxable output service. The firms made huge commercial investments in warehousing and logistics, and large factories across sectors. Refusal of these credits sums on to the cost of executing the business. Thus, it is essential that the government recognizes allowing these constructions concerns ITC.
Streamlining of Investigations, Audits, Assessments Others
In the current times, there has been a rise in the summons given by the GST council to the top management of companies. But the purpose is to plug theft, real companies indeed come beneath the examination council, which raises issues. In the majority of the cases, investigating council provides that are revenue neutral in nature or on the grounds of the opposite advance rulings available in the states. Lessers information and the way in which the document and information seek during audits and assessments. There is hence a requirement for the issuance of deep SOPs for the processes to comply while summons and investigations, the way in which the information seeks in audits and cross empowerment of centre and assure the constancy and ease of the assessee’s operations.
Resolution of Issues
A National Bench of Advance Ruling was intended to be made to solve the GST issues in rulings directed by several states. But the same body is still not set up. GST law committee must recognize and proactively analyze the fields with these typical rulings and said to remove the continued litigation and pile of cases at High Courts.
GST Appellate Tribunals have not been made till now and also still there shall be no clarity to date.
Tax Network Expansion
With petroleum outside GST, a bigger portion of the economy is still outside the tax net.
Closure: Hence, while GST has support to attain important revisions and the goals of unified indirect tax compliance, in the 5 years of GST and the rising audits, the journey for a good and simple tax shall only be carried on. balancing revenue augmentation is essential and ensures the ease of doing the business for the assessee. A revision in the mindset associated with an eye on the improvement shall move longer in giving a boost to India’s economy as we carried on this road to recovery, after the pandemic.
