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.
