Aravind Datar is the Raghuram Rajan of taxation in India. Brilliant, suave and with the same felicity of RR in making complex matters accessible to lay individuals. Please watch the video as an important guide to the unfolding disaster of GST.
I am going to make a very fine and nuanced commentary on GST:
– GST is commendable and progressive in the form it was imagined and conceptualized, ie as one nation one tax. This format was opposed by Modi as the Chief Minister of Gujarat.
– as the Prime Minister, he fostered a GST regime that he dreamt of as the chief minister, ie a nation with state GST, interstate GST, and central GST, at six different rates of taxation, viz 0%, 5%, 12%, 18%, 28% and 28%+ surcharge.
– as a result we have 29 difffent state GST legislations, one interstate GST and one central GST legislation. That’s 30 legislations too many.
– the biggest hurdle to conducting business in the times of this SGST model will be the onerous requirements for filling returns. Today’s 2 returns/ year will be replaced by at least 49 returns/ year (FORTY NINE) PER STATE.
– returns are as below: GSTR1 to GSTR8
– GSTR1/2/3/7 will need to be filed every month by those assesed under GST regime and claiming GST credit (4*12=48 returns)
– GSTR8 is the annual filing that makes it 49!
– of you operate in 10 states, that’s 49*10=490 returns.
– GSTR4, if applicable, will need quartrerly filing and GSTR5/6, if applicable will need monthly fillings as well. These introduce an additional 28 returns per state per year.
– GSTR 1/2/3/7 need to be filed online every month by 10th, 15th and 20th of each month for the preceding month.
1. The GST system continues and perpetuates all the absurdities of the existing VAT and service tax system in India, which is unduly complex. Instead of simplification, all of this absurd requirements are simply migrated to GST. Examples include taxing tooth powder and tooth paste at different rates; taxing the same food served in air-conditioned and non air-conditioned restaurants at different rates, etc etc. Taxing Same service at different rates based upon total revenue of the establishmentN
2. Making all enterprises with revenue less than INR 2m (20 lakh) exempt. This is going to open floodgates for evasion.
3. Burdening a nation with limited computer literacy, limited power supply and limited internet connectivity with draconian and onerous online tax return filling requirements.
4. Not preparing for roll out and running sufficient tests to ensure that the nation is ready for roll-out on 1st July.
This from a government that totally botched demonetization. We are heading for another fiasco…
Via : Sanjiv Bhatt
Disclaimer : This article is Sole opinion of Author and do not necessarily reflect the official policy or position of Irony Of India . The writers are solely responsible for any claims arising out of the contents of this article.