A lot of misconceptions among tax payers have been quelled over the last one year since the Goods and Services Tax (GST) was launched.
“GST is not a disruptive law but a transformational law. As the law matures, industry, which initially had inhibitions and doubts, is now voluntarily complying with the law. We do accept the fact that GST initially had several glitches and had created complexity in complying with it, but now a sizeable chunk of the hitches stand removed,” said A K Jyotishi, Principal Chief Commissioner of Central Taxes, Bengaluru Zone.
Addressing a workshop on ‘GST: Practical Requirements and Challenges’ organised by the Bangalore Chamber of Industry and Commerce (BCIC) on Friday, Jyotishi said the Centre is seriously contemplating reducing the number of tax rate slabs under GST in the near future.
“There is a proposal with the government to reduce the current five-rate tax slab to two rates, as 90 per cent of the taxes imposed come under the 18 per cent tax bracket,” he added. In the same vein, he also sounded a word of caution to GST defaulters.
Jyotishi said: “There is an impression that tax assessees can get away by not complying with GST law in the garb that the department is still using manual methods. But let me flag you, after the initial hand-holding and a go-slow attitude by the trade, which was deliberate, we now have the wherewithal to track tax defaulters and will act with a stern hand, if tax payers continue to default”. He also said the government is using data analytics and defaults have already been detected.
Explaining how simple and plain the GST law is, Jyothishi cited the example of a credit card seller and how he forced him to buy the card despite his strong reservation. “After the initial no-no, I was coaxed to take the credit card. After reaping the benefits of the credit card, I was overwhelmed by the benefits and the ease of transaction. Similarly, GST may look complex initially, but let me tell you that once you begin to adapt to the new law, operations will be as simple as sending an SMS to the department.”
Jyothishi said according to current records, there are eight lakh assessees (3.4 lakh Central Government monitored and the rest by the state). The Department collects on an average Rs 6,500 crore every month. The tax base has increased from 60 lakh to 1.10 crore. Basically, the increase is due to voluntary compliance and also some sectors, hitherto left out, have now come under the GST gambit.
Jyothishi said “Any change in taxation policy is very sensitive in nature as it has a range of ramifications across population and asset class. However, what is undeniable is that we must embark on reforming tax structures, simplifying the code, widening the tax net and also aim at reducing the slab rates of GST.”
Kishore Alva, President, Bangalore Chamber of Industry and Commerce (BCIC) & Joint President and Executive Director, Adani - Udupi Power Corporation Ltd said: “Despite a few drawbacks that the industry is facing due to the new tax legislation, we must celebrate this landmark reform. At the same time, we must also acknowledge that half the job is done as far as tax reform is concerned. We have a long way to go.”
Source :  The Hindu Business Line