FinMin Tells About GST Milestones Before Fourth Anniversary

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On the eve of the fourth anniversary of the Goods and Services Tax (GST), the finance ministry said the indirect tax regime has helped lower tax rates and facilitate compliance. The ministry said the improvements have led to the filing of 66 crore GST returns over the past 4 years.

“It is now widely recognized that the GST benefits both consumers and taxpayers. While the high tax rates of the pre-GST era acted as a deterrent to paying tax, the lower GST rates helped increase tax compliance. Over 66 crores of GST returns have been filed so far, ”the finance ministry said in a tweet.

Merchandise trading companies with an annual turnover of up to ₹40 lakh are exempt from the tax. In addition, those whose turnover reaches ₹1.5 crore can opt for the compounding scheme and pay only 1 percent tax.

Service providers with a turnover of up to ₹20 lakh per year are exempt from GST. Company in the service sector with a turnover of up to ₹50 lakh per year can opt for a compounding scheme for services and pay only 6 percent tax.

Listing the achievements of the GST, the finance ministry said the tax system has reduced the tax rate. “The neutral income rate recommended by the RNR committee was 15.3 percent. Compared to that, the weighted rate of the GST at present, according to the RBI, is only 11.6 percent. . “

The GST has significantly alleviated 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 up to 495 different bids. Under the GST, that number dropped to just 12.”

“The multiple markets across India, with each state applying a different tax rate, has resulted in great inefficiencies and compliance costs. Under the GST, compliance has steadily improved, with around 1.3 crore of registered taxpayers, ”the ministry added.

The Finance Ministry said the GST replaced the complex indirect tax structure with a simple, transparent and technology-driven tax system and thus integrated India into a single common market.

“With the continuous simplification of procedures and the rationalization of tariff structures in order to facilitate the respect of the GST for the common man as well as for the trade, we were able to achieve the economic integration of the country with a human touch”, a added the ministry.

Along with the achievements, the Ministry of Finance also listed the relief measures for the GST regime extended to taxpayers due to the Covid-19 pandemic, notified on May 1 and June 1. tax compliance standards.

The national GST regime was put in place on July 1, 2017 to encompass and replace 17 local levies such as excise duty, service tax and VAT and 13 taxes.

Under this uniform indirect tax system, a four-rate structure that exempts or imposes a low tax rate of 5 percent on essential items and a maximum rate of 28 percent on cars is levied. The other tax brackets are 12 and 18 percent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect amounted to 31 percent of the tax due, on average, for a consumer.

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