GST, Goods, and Services Tax, this is probably the most comprehensive taxation law in the country. With its inception, it simply repealed four different laws running the indirect tax regime in the country. It came as a single regime in place of all of them. Where there were taxation rates under different laws, one GST rate list came and did away with all the taxations, and there have been many more such advantages of GST.
So, how has the Act been down the line in these three years? Has it led to any good? Let us see that. But before that, let us know what this Act is.
What is the GST Act?
GST Act is a taxation law for the supply and provision of goods and services. Earlier, the Central Sales Tax and VAT governed the supply of goods, while the Service Tax Act governed the provision of services. Moreover, even the manufacture and production of goods was regulated by the Excise law. GST came as one single, uniform law in place of all these laws.
Now, with GST applicable in the country, everything is under one single umbrella. And this step has impacted the country to a whole different level. There has been a success, there has been a failure too, and things are still changing. So, what has GST done for the country and what it plans to do?
Advantages of GST
GST has brought a whole lot of benefits for the taxpayers as well as the country as a whole. And it is in these advantages that we can see the amazing success of this beautiful Act.
Reduction of Cascading Effect of Tax
The cascading effect of tax means the burden coming over the taxpayers concerning taxation. This was very prominent under the old tax regime. Reason? The multiplicity of taxes. With so many laws governing the taxation in the country, down the line, it happened that the taxpayers ended up paying a lot of tax for one single product or service. They usually ended up paying multiple taxes for the same product or service. For instance, for what product they have paid tax under the Central Sales Tax Act, even VAT may be levied on the same article. This is double taxation. And this sure was burdensome for the taxpayers.
GST eliminated this and came as one single tax. Now, when there is only one tax, the question of double taxation does not even arise. So, the law has significantly helped to reduce the cascading effect of taxes.
Reduction of Corruption
Corruption arises somewhere when people can see that the law is being unfair to them. The applicability of so many taxes and the consequent cascading effect had led the people to corruption. They had turned to unfair means to save themselves from double taxation. This was a significant loss of revenue to the country.
GST has significantly helped in reducing this corruption. It has been a very fair law, and with the way it is governed in the country, the possibilities of using unfair means and corruption have been eliminated. Even the people have been towards strict compliance, and that has worked great for the Indian economy.
Betterment of the Economy
The economy plays a vital role in the growth of the country. A strong economy is what makes a country developed from a developing one. Due to the reduction of corruption with the coming of GST and the better governance of law, the Indian economy has significantly improved, and this is a big success for the GST Act.
Promotion of Digital India
Being new, this Act has brought a lot of new, and one of them is the inclinement towards digital India. The Act came along with a GST website and a GST online portal. With these two initiatives, the complete manner in which taxation laws have run in the country has changed. Now, everything that was manual could be done online. You can have online registrations, online payments, online return filing, and a lot more. Even the latest GST news and updates come over the GST website. This has been a significant step in promoting digital India and easing out the things for taxpayers as well.
Disadvantages of the GST Act
As I mentioned, there have been failures too. And yes, that is the case with every other law. With its major advantages, there are minor disadvantages too. GST is no different. It has a disadvantage for the taxpayers in the form of an increase in the operational cost. Although the tax has come to ease out the things for the taxpayers, it is not as good and simple as it was claimed. In fact, the stricter compliances have created a need for the taxpayers to employ GST professionals, thereby adding to their operational costs. This has agitated the taxpayers to a certain extent, and while there are many in support of the Act, there are some who totally disapprove of it.
So, the Act has not been successful in keeping everyone happy, and people do face problems with coping up with the Act. This is a considerable failure on the part of the Act. But, every failure gives a chance to improve. And so has GST. It has been making continuous amendments to make things better.
GST has the consideration of the problems that people are facing under it. So, the government is taking continuous initiatives to eliminate all of that. With the way even this law is changing with constant amendments for the better, there sure is a lot of success ahead. The law has made many amendments, and they are continuing. All these amendments have come for good.
So, what is next with GST. All I can say is a better and improved GST Act that will be loved by all.
GST is an Act that has had its share of successes and failures. However, the successes far outgrow the failures. There are many advantages of GST and the best of them can be seen from its exceptionally fair GST rate list. Yes, there are some lacunae and loopholes, but with the continuous improvements in the Act, a lot of them have been eliminated, and rest will be eliminated soon. So, all you can expect from GST is a good and simple taxation regime.