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Business News/ News / India/  GST turns 5: 45% businesses give it a thumbs up, 24% express dissatisfaction

GST turns 5: 45% businesses give it a thumbs up, 24% express dissatisfaction

The survey also stated that 37 per cent of businesses are spending more time on GST compliance versus pre-GST business taxation period.

Goods and Services Tax | Representative image (HT_PRINT)Premium
Goods and Services Tax | Representative image (HT_PRINT)

With the Goods and Services Tax (GST) about to complete 5 years on 1 July, 2022, 45 per cent of businesses are happy while 24 per cent have expressed dissatisfaction, said a survey report by LocalCircles.

The survey also stated that 37 per cent of businesses are spending more time on GST compliance versus pre-GST business taxation period. Apart from this, 50 per cent of businesses say their monthly accounting costs for them have increased post-GST, added the report.

ALSO READ: New GST rule: Packaged food to unbranded rice & floor, what will get costlier?

Also, connections issues, logging on and submitting information are amongst top issues business have with GSTN website. Furthermore, 75 per cent of businesses say invoice matching between outputs and inputs is their top issue with GST.

Earlier, LocalCircles -- India’s leading Community Social Media platform -- collected over 12,000 responses from over 2,400 businesses located across 170 districts of India. Forty-seven per cent respondents were from tier 1, 32 per cent from tier 2 and 21 per cent respondents were from tier 3, 4 and rural districts.

The platform informed that it will will share the results of this study with the Ministry of Finance and the GST Council so that feedback of the businesses received can be given the due consideration and improvements can be made.

ALSO READ: GST Council discusses compensation issue ‘informally’

Meanwhile, the GST Council on 28 June decided to correct several tax rates and withdraw some tax exemptions. According to the new rule, pre-packed and labelled food items (except frozen) like meat, fish, curd, paneer and honey will now attract a 5% GST.

Also, GST Council gives in-principal approval for relaxation in provisions for suppliers making supplies through e-commerce operators. Among other details, GST Council recommends that hotel accommodation priced up to 1,000 per day shall be taxed at 12 percent.

The council recommended raising rate on Tetra Pak, printing, writing or drawing ink, LED lamps, lights and fixture and their metal printed circuits board to 18 percent from 12 percent.

Commenting on the GST slab revision, SW India's Ankur Gupta said, "By bringing amendment and replacing “branded" with “prepackaged and labeled" a lot of local unbranded products which are used in all households would also come under the taxable ambit, hence, we might see an increase in prices like curd, lassi, papad, honey, cereals, etc. In order to rationalize the inverted duty structure in a few industries, the rate of tax has been increased to reduce the inverted duty impact like goods for petroleum, works contracts to services to Government, led lights, solar water heaters, tailoring, and other textile job work."

"However, there are still some aspects that have been deferred like a decision on taxing crypto to iron out all aspects including valuation of supply and then finalizing the tax rate, setting up of GST Tribunal," he added.

The government implemented the GST on 1 July, 2019, after 101st amendment of the Constitution of India. It replaced multiple taxes, which were levied by the Central and State Governments, so that there would be 'transparency' and 'ease in tax compliance' than the pre-GST indirect tax structure that had a broad scope for tax evasion.

ALSO READ: Kerala FY23 budget assumes GST compensation for full year: KN Balagopal

The single-tax GST is applied all over India and has our slabs of 5, 12, 18 and 28 per cent respectively. Over the years, items -- to be included or excluded in the slabs -- have been revised by the government based on the inputs its received from the business sector. The recent change announced by the government included 28 per cent GST on any digital transactions related to cryptocurrency or NFTs.

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Updated: 29 Jun 2022, 08:30 PM IST
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