The idea of GST was to transform India into a single market. GST substituted 17 taxes and cesses with five tax rate slabs (0% to 28%). There has been an increase in the GST collection after the implementation of the new indirect tax system.
However, there are a few vital focus areas which need immediate attention. The new government will need to work on the following aspects of GST on priority to elucidate the overall GST Network.
- Simplify GST compliance
Several businesses have raised their concern regarding multiple registrations, delayed refunds, dispute resolution, and invoice matching. To avoid complexities, the overall GST mechanism needs to be revamped.
- Include electricity under the GST net
Currently, GST charges do not apply to electricity distribution and transmission via a service provider. As of now, the sector has high rates for industries and several taxes for consumers with low rates. If a uniform GST is levied on the industry, it will not only result in electricity getting cheaper, but will also boost the morale of the manufacturing industry.
- Increase the GST base
The government must include goods and services such as aviation turbine fuel, real estate, natural gas, electricity, and petroleum into the GST net. The GST tax rates of India are amongst the highest standards in the world. Hence, the tax base needs to be expanded so that the tax rates can be rationalised further and thereby leading to lower tax rates.
- Provide comprehensive guidelines for computing GST
The new government needs to emphasise on issuing brief instructions on the steps involved in computing GST. This is because several investigations have proven that businesses have been found guilty in passing on the GST benefits to its consumers. The methodology used for computing the benefits is not transparent.
- Revamp the GSTN portal
The GSTN portal has technical glitches which need immediate attention. GSTN has to be updated with the recent changes that have been incorporated by the GST Council.
At this point, it is evident that GST is still a work in progress and requires a lot of changes. The new government needs to undertake adequate measures to streamline the GST system on a timely basis. Revamping GST is one of the vital steps which will help to transform India into one market.