Simplification of GST collection process

The 57th meeting of the GST Council took place recently. The discussions and proposals presented there clearly indicated that the government considers GST collections a valuable source of its treasury. When the Modi government implemented the scheme with the objective of “One Nation, One Tax,” there were many apprehensions, including some from tax regulators and markets. However, dispelling these doubts, the GST machinery far exceeded its target. The target was set at ₹1 lakh crore, with a fiveyear balance sheet. A provision was also made that if states incurred any losses, their tax losses would be compensated within five years. However, this target was achieved ahead of schedule, and tax collections in the country are now far exceeding this target. The central government’s compensation compensation for the states’ tax losses has also expired. Now, state governments are demanding that this compensation amount continue to be implemented, which the central government is not obligated to accept. One thing can be said without a doubt: the One Nation, One Tax scheme has been successful. In the last meeting, tax rates were simplified to two rates: 5 percent and 18 percent. Luxury goods are subject to a 40 percent rate, which is not particularly important for the affluent. The proposals presented at the 57th meeting made it clear that, while there is no proposal to change the rates, the government wants to further simplify the GST process for small traders and retailers. Furthermore, it wants to encourage them by providing relief from the penal law process. The new legislation expresses complete trust in businessmen. It is understood that businessmen are businessmen, and tax evasion is not a serious enough crime to warrant immediate arrest. However, a provision has been made that if businessmen make mistakes in paying GST or filling out forms, they should be prosecuted, facing fines or jail time. This penal code indicates that even the most significant tax evasion at every stage warrants a hefty fine instead of jail time. All the proposals will come into effect from the next financial year i.e. from 1st April. Currently, traders have to file GST returns thrice a year. Now retail traders and small shopkeepers will have to file GST returns once a year. They had to pay GST tax every month, now this tax will have to be paid thrice a year. More than 16 lakh retail traders in the country will benefit from this. The definition is that a trader with a turnover of less than Rs 5 crore is considered small or retail. Retail traders will not suffer any loss due to this because traders with a turnover of more than Rs 5 crore take credit by showing their inputs, but there will be no problem with inputs below Rs 5 crore. The total scope of GST covers 10.5 million businesses. The two-year imprisonment for GST defaults on businesses with turnovers exceeding 5 crore rupees and less than 10 crore rupees can now be reduced to six months, or a fine. The previously imposed 10-year imprisonment for defaults on businesses with turnovers exceeding 10 crore rupees can now be reduced to an additional fine. This new GST tax payment process is very simple and favorable to businesses. It should be welcomed, but tax regulatory authorities must be more vigilant and case decisions should be expedited. Only then can the environment of fraud in the GST tax collection process be completely eliminated.