66 cr returns filed, 1.3 cr taxpayers onboard: FinMin recounts GST milestones ahead of fourth anniversary
2 min read . Updated: 30 Jun 2021, 03:59 PM IST
PremiumUnder GST, the number of submissions for a company looking to doing business in every state has been reduced from 495 to just 12, Finance Ministry said
On the eve of fourth anniversary of Goods and Services Tax (GST), Finance Ministry stated the indirect tax regime has helped lower tax rates and made compliance easier. The ministry claimed that the improvements has led to 66 crore GST returns being filed in the last 4 years.
"It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance. More than 66 crore GST returns have been filed so far," the Finance Ministry said in a tweet.
Businesses dealing in goods with an annual turnover of up to ₹40 lakh are exempt from the tax. Additionally, those with a turnover up to ₹1.5 crore can opt for the Composition Scheme and pay only 1 per cent tax.
Services providers with turnover up to ₹20 lakh in a year are exempt from GST. Business in the service sector with turnover up to ₹50 lakh in a year can opt for composition scheme for services and pay only 6 per cent tax.
Listing the achievements of the GST, the Finance Ministry stated that the tax regime has reduced the tax rate. "The revenue neutral rate as recommended by the RNR Committee was 15.3 per cent. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6 per cent."
GST has significantly eased one of the most complex indirect tax systems in the world, the ministry said. "A company looking to do business in every state had to make as many as 495 different submissions. Under GST, that number has reduced to just 12."
"The multiple markets across India, with each state charging a different rate of tax, led to great inefficiencies and costs of compliance. Under GST, compliance has been improving steadily, with around 1.3 crore taxpayers registered," the ministry added.
The Finance Ministry said that GST has replaced the complex indirect tax structure with a simple, transparent and technology-driven tax regime and has thus integrated India into a single common market.
“With the continuous simplification of procedures and rationalisation of rate structures so as to make GST compliance easy for common man as well as the trade, we have been able to achieve economic integration of the country with a humane touch," the ministry added.
Along with the achievements, Finance Ministry also listed the relief measures under the GST regime extended to taxpayers in view of the Covid-19 pandemic, notified on May 1 and June 1. The steps include reduction in rates, waiver of late fees and relaxation in tax compliance norms.
The nationwide GST regime was rolled out on July 1, 2017, to subsume and replace 17 local levies like excise duty, service tax and VAT and 13 cesses.
Under this uniform indirect tax system, a four-rate structure that exempts or imposes a low rate of tax 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer.
