Can GST bring stability

Can GST bring economic stability 

Goods and Services Tax:

The Goods and Services Tax (GST) was implemented from 1st July 2017 and the aim of the tax was to streamline the tax collection of government by reducing the tax evasion. The traders, businessmen and people faced a lot of difficulties at the time of its implementation, but now it is bringing good results in the form of great collection of taxes. In starting, the GST had been opposed by the traders and even criticized by the experts but soon it started showing its benefits.  In October 2018, the GST collections become more than Rs. 1 Lac Crore including CGST, SGST, and IGST. The increase in collections is being seen due to festival season during the quarter. However, the number of GST return filers also increased from 60 lacs to 70 lacs during March to October 2018. The GST council tried to simplify the processes of collecting GST by arranging meetings and taking several measures during the whole year of 2018; however, cutting down the number of different rate slabs of GST can further improve the tax collections.

GST as an indicator of economic stability

Such collection of GST is a positive mark for the economic development of India. India is still dependent on foreign investments to meet its capital requirements. The collection of taxes in large amount can make it self-dependent to finance its development expenditures but that can be possible in long term because at present the economy is suffering with huge interest on debt payments everyyear. The average monthly revenue generated from GST collections during the year 2017-18 was Rs. 89885 crores. In case, the GST collections improved further, it is possible that GST bring economic stability and the nation may require to raise less loans; which will definitely improve the overall image of India. The rupee will appreciate and the investors will prefer to invest in rupee. The future of India seems bright only due to high collections of Goods and Services Tax (GST).

Challenge to deal Fake Bills

In GST, there is provision to provide input tax credit and the officials of Central GST Commissionerate and State Taxation Departments detected a lot of cases relating to "issue of fake invoices without supply of goods". There are firm's who are associated with only bill trading and are being detected by the officers. How it is possible, let us understand the concept. 

Firm A showed that it sold goods to Firm B without supplying the goods only in invoice. The firm A issued the billed to firm B with imposing GST and firm B made the payment. The tax amount in bill is availed as input tax credit. After payment, the firm B which purchased the goods (without getting any supply) returned the goods back to the firm A. These transactions are not fully in bank accounts and the cash transactions are mixed to evade the tax.

*Copyright © 2018 Dr. Lalit Kumar. All rights reserved. 

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