View of INNOVATIONS & AMENDMENTS ON THE ROAD TO IMPLEMENT GST IN INDIAN SCENARIO

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Vol. 05,Special Issue 02, (IC-IRSHEM-2020) February 2020, Available Online: www.ajeee.co.in/index.php/AJEEE

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INNOVATIONS & AMENDMENTS ON THE ROAD TO IMPLEMENT GST IN INDIAN SCENARIO

Ritu Narula

Assistant Professor, D.A.V. College, Abohar

Abstract:- In July 2017 Indian economy witnessed a big change in its Indirect Tax regime.

The Indian economy is at its developing stage and needs sufficient resources for the developmental activities for the welfare of the society and most of the finances and funds arise from taxation. Earlier, the tax structure of India was very complex. To simplify the difficulties of taxation system, the Indian government continuously making innovations in the taxation system to rationalize tax regime and produce more revenues for social welfare, education , infrastructure, and many other developmental activities. After getting it passed, the 101st Constitutional Amendment i.e. GST Act, it came out as an actuality on 1st July 2017. To overcome the complexities faced by GST, The Indian Govt. is taking innovative steps to simplify it.

Taxation system of the country plays essential role in economic development of the nation. Effective taxation system generates more revenue and gives support to government in the expenditure on infrastructure development, education and public services. GST creates a positive impact on the GDP growth rate, exports, manufacturing sector and in employment generation. After the successful implementation of the GST, it has brought inclusiveness, innovation, uniformity, efficiency and transparency. This taxation system has a uniform rate of tax. The researcher pays a special attention on the amendments on the road to implement GST in streamlined manner.

Keywords: GST, Innovation, Amendment in GST, India, Taxation 1. INTRODUCTION

In every country, Government has to carry out various functions such as development of infrastructure, health, education, defense, eradication of poverty, maintenance of peace etc.

A large amount of money is required to perform these activities. Tax revenue is the main source of income for the government.In today's era when we book a flight, and perform several banking activities from our mobile phones, technology is shifting customer's expectations across the world. In every economy, these factors are compelling organizations to innovate speedily, and taxation authorities also have a lot to gain or lose from these innovations. Taxation authorities made decisions based on these innovations to provide high-quality citizen services, better revenue collection, and create operational excellence.

Taxation authorities are making advancement in digitizing interactions with taxpayers.GST is one of the massive indirect tax reforms in India.

The implementation of GST on 1st July, 2017 replace the complicated multiple indirect tax structure. GST known as the Goods and Services Tax is characterized as the big indirect tax regime designed to support and intensifies the economic growth of Indian economy. Approximately 150 countries have adopted GST. GST has helped to remove the cascading impact of multiple taxes. After implementation of GST, the burden of taxes has lessened for corporates and customers. Taxpayers have risen in number and the tax revenues have increased for the government. The taxation regime is now simpler to administer. There have been various amendments in the CGST Act, which favor the assesse with better compliance. There have been various updates in the sections related with the payment of taxes and interest, hence simplify the filing of GST returns and lessening the burden of interest rates.

The threshold limit for supplier of goods for registration under GST has been raised to Rs 40 lakh from Rs 20 lakh. This new amendment will help small and medium scale firms, who can avail the benefit of a higher exemption limit and exempt from filing returns and collecting taxes.In the registration under GST, a sub-section has been introduced under section 25 of GST, related to the procedure of registration. The government has now made it compulsory Aadhaar authentication for taxpayers under GST Act. Registration allotted to corporate bodies other than individuals, the Aadhaar authentication of its representative or authorized signatory needs to be submitted in such cases.

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2 2. LITERATURE REVIEW

Ehtisham Ahmed and SatyaPoddar (2009) studied, “Goods and Service Tax Reforms and Intergovernmental Consideration in India” found that GST implementation will provide simple and transparent system of taxation with rise in output and productivity of economy.

The benefits of GST are totally depends on rational design of GST.

Jaiprakash ( 2014) in his study the researcher referred that the GST at the Central and the State level are expected to give more aid to industry, trade, commerce and agriculture through comprehensive and broader coverage of input tax credit and subsuming of various taxes in the GSt. GST offers us the good option to wider our tax structure.

Mrs. Poonam (2017) in this study researcher stated that the of Goods and Services Tax (GST) is very important step in the area of indirect tax regime. The cascading effects of multiple taxes reduced by merging various central and state taxes. Tax burden is approximately reduced to 25% to 30% after introduction of GST. After implementation of GST Indian products became more competitive in the international markets.

Monika Sehrawat and Dhanda have examined the variousbenefits and the challenges related with the GST. They have observed that the legal procedures in implementing, consent from all the states, proper awareness on the concept of GST regime are the challenges associated with the implementation of GST.

2.1 Objectives of study

1) To analyze the amendments in GST in the finance bill 2019.

2) To examine the impact of GST on Indian Economy.

3) To provide suggestions and recommendations regarding GST.

3. RESEARCH METHODOLOGY

The study focuses on extensive study of Secondary data collected from various books, government reports from various websites which focused on various aspects of Goods and Service tax.

3.1 Amendments in the CGST Act, Under the Finance Bill, 2019 1. Composition Scheme

Amendment in Section 10: Composition Scheme

The schemeis now available to suppliers of services (to whom present composition scheme is not available). This amendment is introduced for service suppliers and suppliers of both goods and services, having an annual turnover in the preceding financial year up to 50 lakhs. This amendment clarifies that services that are provides by way of extending deposits, loans and advancesetc. Shall not be considered as the part of aggregate turnover.

2. Registration

Threshold limits of aggregate turnover for exemption from Registration under GST for suppliers of goods would be Rs 40 lakhs and Rs. 20 lakhs (in the states Arunachal Pradesh, Nagaland, Mizoram, Sikkim, Puducherry, Telengana, Tripura and Uttarakhand) . This amendment is helpful for small and medium size enterprises whose aggregate turnover of goods does not exceed Rs.40 lakhs.

3. Procedure for Registration

For registration under GST, a new sub-section has been introduced related to the procedure of registration. The government of India decided to make Adhaar authentication mandatory for new suppliers from January 2020.This section also describes the manner of Aadhaar authentication. The registration would be invalid, If a person fails to do Aadhaar authentication. The Aadhaar number of the authorized signatory and representative of corporate bodies such as Managing Director, Board of Trustees, Kartaetc. Shall also need to be submitted and authenticated.

4. Mode of Supplier's Payments

Amendment Section 31A: Mode of Payment

A new section introduced in the CGST Act which will made it compulsory for certain registered suppliers to give their recipients the option of making electronic payments. This will help in prevent the evasion of taxes.

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3 5. Furnishing of GST Returns

Amendment in Section 39: Furnishing of Returns

This section has been amended and now composition dealer to file a self- assessed return in one-page form GST CMP 08 instead of GSTR-4 of seven pages every quarter. This amendment gives a big relief to 20 lakh composition suppliers. As per the amendment composition dealers get rid from cosly and cumbersome tax compliance.

6. Utilization of input tax credit

A new sub section inserted to specify that a tax payer would be able to utilize the ITC on account of CGST, SGST or UTGST only after exhausting all the credit on account of IGST available to him towards payment of IGST, CGST, SGST or UTGST. ITC on account of IGST shall first be utilized towards payment of IGST, and the amount remaining, if any, may be utilized towards the payment of CGST and SGST or UTGST, as the case may be, in any order.

7. Amendment in Section 50: Interest on delayed payment of tax

According to amendment the interest is charged on unpaid taxes levy only that portion paid in cash i.e. through the electronic cash ledger. This amendment will be beneficial for taxpayers who, before this amendment, had to pay interest on the whole portion of unpaid taxes without taking ITC, now the taxpayer had to pay tax on that portion which is paid by cash, thus it reducing their tax burden.The benefit of this amendment will not given to those taxpayers whose proceedings have been initiated under Section 73 and Section 74of CGST Act. These taxpayers shall have to be paid tax on the gross tax liability.

4. IMPACT OF GST ON THE INDIAN ECONOMY AS A WHOLE

The application of GST has significantly impacted the Indian economy in the number of ways:

4.1 Simplification of the tax regime

GST has streamlined the taxation structure of the country. GST is one nation onetax,to be levied at the multiple stages of the supply has become much easier now. In GST every supplier is liable to pay output tax and setoff this tax liability against the tax paid on inputs.

4.2 Promoting and fostering production

As per the survey of Indian retail industry, the total tax element is approximately 30% of the product cost. Due to the implementationof GST, the taxes have been reduced. Due to this, products became cheaper and the consumer has to pay less amount of taxes. The lower burden of taxes has increased the production and growth of the retail industry and other industries.

4.3 MSME support

Micro Small and medium enterprises can now take registration in GST under the Composition Scheme. These enterprises now pay taxes according to their annual turnover as per this scheme. Therefore, small businesses having an annual turnover of Rs. 75 lakhs for northern east states Rs. 1.5 crores for other states only have to pay 1% GST. On the other hand the enterprises providing services having a turnover of Rs. 50 lakh are required to pay 6% of tax under composition scheme.

4.4 Boost up in exports

The cost of products in the domestic markets has also reduced due to seamless flow of ITC.

This factor contributing in boost up exports and manufacturing activity. Organizations have become more efficient and competitive because of neutralization of taxes for exports.

5. RECOMMENDATIONS

5.1 Steps to improve GST compliance

There are various steps that the Indian government needs to take few steps in making GST more compliant. Aneasy and simplified return format for GST should be introduced as soon as possible.

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4 5.2 Reduction in Number of Tax Slabs Rates

GST is referred as one nation one tax but in actuality it is a dual taxation in which state and union government levy and collect tax on a single transaction. The increasing GST rates is not an optimal solution for generating more revenue especially in situation of an economic slowdown in country. Thus there is a requirement for a simplified taxation structure of only three tax slabs. We recommend to merge 12% & 18% slabs into one.

5.3 Spreading the scope of GST

There is still a need to broaden the area of GST by including those who are away from paying GST. The GST council should takes steps to bring the real estate sector, petroleum products and electricity under GST umbrella. The scope of GST could be expanded through including industrial fuels like Aviation Turbine Fuel and natural gas. Targets for GST Collection

5.4 Targets for GST collection

As per the government’s report, monthly collection of tax under GST is a little more than Rs. 1 lakh crorein 2019-2020 so the revenue target of government has not achieved by large numbers. Collection of Revenue is important but it totally depends upon the smooth functioning of businesses and broadens the tax base.Special attempts and initiate actions against tax evaders or those who are issuing fake invoices or fake e-way bills and fraudulent ITC seekers.

6. CONCLUSION

The GST regime is basically designed to simplify earlier Indirect Taxation system in India. A well-structured GST is alluring method to get rid of earlier multiple taxation. GST will lessen the compliance burden of tax payers. GST has face many challenges after its application. The amendments introduced in GST reveals that the government is trying its best to make GST hassle free. Various ways should be found for lowering the compliance cost, and necessary amendments may have to make for the benefits of the tax payers. GST will become effective when the entire nation works as a whole towards making it successful.

On the basis of various studies we conclude that Goods and Service tax plays a significant role in the growth and development of nation.

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