Two years after the introduction of Goods and Services Tax (GST), increasing tax evasion and slow refund process remains major challenges for the government, as it gears up for a reformation of the tax system.
“GST will be a milestone in Indian economy. In two years, we have achieved almost a stable process. And now, it is time to tighten loose ends. Tax evasion is still a matter of concern. Our next focus will be on curbing evasion and speedy refund process,” a GST Council official told TMS.
So far, the government has detected GST evasion of about Rs 20,000 crore (from April to February 2018-19), of which Rs 10,000 crore has been recovered. Meanwhile, India Inc has demanded that the GST reform leapfrogs to its second phase by bringing electricity, oil and gas, real estate and alcohol under its ambit and converging the rate structure into two or three slabs.
According to the Federation of Indian Chambers of Commerce and Industry (FICCI), divergent rulings by different revenue officers in various states has created ambiguity and an environment of uncertainty and chaos among taxpayers.
FICCI suggested that the government should contemplate constituting an independent, high-level, Central body as an ‘Authority of Advance Ruling’ for GST cases, similar to the one under the erstwhile indirect tax regime.
The Confederation of Indian Industry (CII) too said that the government should take up issues related to simplification of GST compliances and filing of returns, matching of invoices and getting a seamless input tax credit.
The new format for filing of simplified returns released for trials is yet to be tested.
The GST payer is currently required to file e-way bills, GSTR-1, GSTR-3B, ITC-04, annual returns and annual audit (if applicable). Even under the proposed returns system, there are three categories. The multiplicity of returns filing categories conveys lack of trust in GST payers, it said.
Many of the concerns were already discussed in the 35th GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman. The Centre is planning to initiate many more. Kicking off celebration to mark two years of the GST implementation, the finance ministry will on Monday come up with further reforms in the indirect tax system with the introduction of new returns system, rationalisation of cash ledger system and a single refund-disbursing mechanism.
The GST was implemented through a gala ceremony held in the Central Hall of Parliament at the midnight of June 30, 2017. It came into effect on July 1, 2017.