New Delhi, Jun 26: Finance Secretary Hasmukh Adhia today said Goods and Services Tax (GST) has entered a “smooth phase” within a year of its rollout, with “pretty good” tax compliance and the efforts will now be to simplify tax return forms.
Biggest tax reform since Independence, the GST was rolled out on July 1, 2017 which subsumed over a dozen local taxes. It transformed India into a single market for movement of goods and services.
Over 1.11 crore businesses have registered themselves under GST. The average monthly compliance of return filing and tax payment is going up in a staggered manner and over a period it is expected to be around 96 per cent, Adhia said.
Adhia, in an interview to on one year of GST, listed out the benefits of the new tax regime saying it has reduced plethora of taxes, removed cascading effect of taxation and state check post, increased taxpayer base with much less possibility of evasion and brought about end-to-end electronic filing.
“Of course, for any new system there will always be initial glitches. These glitches were also mainly on account of lack of information and so the moment information gap was removed, people felt more comfortable. I think all the glitches are over and we are in a smooth phase of implementation,” said Adhia, who also holds the charge of Revenue Secretary.
Asked what would be the focus in the second year of the GST regime, the Secretary said the tax officers are working on a single page return form which will be modular in nature and “user friendly”.
“This year’s main agenda would be to implement the new and simple system of filing of returns,” he said.
Asked about critics saying that GST has not led to the intended formalisation of economy, Adhia said the “data suggests otherwise” as the number of people coming into the tax net has gone up post the rollout of the new indirect tax regime.
“Pre-GST there were about 60-65 lakh businesses who were migrated and the remaining (nearly 48 lakh) are all new. So this many new dealers or businesses coming into the tax net, and that percentage wise is quite high. If it is not formalisation, what is it?,” Adhia questioned.
He said 25 per cent of the businesses who file GST returns have zero tax liability and hence file returns with a lag as there is very less penalty.