GST indeed remains to be one of the biggest tax reforms since independence. It has brought a paradigm shift in the tax liabilities of the people, by removing the cascading to taxes, increasing the threshold of registration, decreasing compliances, increasing logistical efficiencies, and bringing the unorganized sector under the ambit of taxation. Initial disruptions in the GST regime were duly anticipated. India, being a diverse country with a quasi-federal structure, issues emanating from various states as well as from exports sector was within natural speculation. However, additional problems began to prop up and the government had to resort to one-to-one resolution of problems. GST within a year of demonetization has apparently caused slowdown of the Indian economy as well. Hence, policymakers and the GST council have decided to revise rates for 66 items.
The Finance Minister has revealed that there were 133 representations from the industry and each were scrutinized well by the GST Council. The council revised rates on 66 items such as pickles, sauces, fruit preserves, insulin, cashew nuts, insulin, school bags, coloring books, notebooks, printers, cutlery, agarbattis and cinema tickets. He expects that revenue buoyancy and a check on inflation will balance the new changes.
Goods on which taxes are not imposed:
Jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, Stamps, judicial papers, printed books, newspapers, Bangles, handloom, Bones and horn cores, bone grist, bone meal, hoof meal, horn meal, Cereal grains hulled, Palmyra jaggery, Salt – all types, Kajal, bindi, Sindoor, Children’s’ picture, drawing or colouring books, Human hair, Khadi purchased from Khadi and Village Industries stores, Clay idols, brooms.
Services without tax:
Hotels and lodges with tariff below Rs 1,000 Grandfathering services Rough precious and semi-precious stones- 0.25% GST Arun Jaitley has also insisted that the GST council’s agenda was to remain revenue neutral, so as to strengthen the small merchants and enterprises. The transition rules have taken care of not disturbing the stocking or destocking, thereby ensuring the adequate supply of commodity in the market.
The GST Council has allowed the additional verification facilities to enroll taxpayers on the GST Network including the one-time password and banking verification. These new set of regulations and revisions can resolve the problems of the July 1 rollout which has been considered as unwise and ill-prepared by industry experts.
Article by Mausam.