THE Goods and Services Tax (GST) touched seven years of implementation on July 1 amidst record collections exceeding Rs 20.14 trillion in FY 2023-24. The way for forward momentum was paved by FM Nirmala Sitharaman when she chaired the 53rd meeting of the GST Council recently. MoS for Finance, Chief Ministers of Goa and Meghalaya, Deputy CMs of Bihar, Haryana, Madhya Pradesh, and Odisha, along with FMs of states & UTs (with legislature) also attended the meeting. In its 2.0 avatar, the GST reform agenda is being dominated by demands for improving ease-of-doing business, effective dispute resolution, maximising impact and optimising facilitation/compliance, streamlining tax framework and focus on MSMEs.
Amendment to overrule retrospective tax demands and offering an effective disputeresolution process are holding forth in industry, business and other stakeholders’ discourse ahead of the Budget, which is expected to chart India’s reform path for the next five years even as about 84 pc of India Inc. – in a Deloitte GST@7 Survey – expressed strong support for GST implementation. As per the survey, the confidence in the reform process has increased from 59 per cent in 2022 and 72 per cent in 2023 to 84 per cent in 2024.
The Global Trade Research Initiative data shows that GST has become the world’s largest platform for indirect taxes with over 1.46 crore registrations. In FY2024, GST collections reached Rs 20.18 lakh crore with 29.85 per cent from imports, 26.92 per cent from inter-state supplies and 43.23 per cent from within-state supplies. India Inc. has enhanced confidence in the workings and efficiency of the GST regime. Such positive sentiment is reflective of supply chain efficiencies, benefits of tax, technology and continued stakeholder engagement on GST policy matters.
There is an urgency to support to the MSME sector through the implementation of streamlined processes, such as virtual verification and standard documentation, which can help MSMEs navigate compliance challenges effectively and contribute more robustly to economic growth. MSMEs have shared positive sentiment towards GST implementation this year compared to previous years and they continue to believe that the quarterly filing of returns for MSMEs is beneficial and improves compliance. What they need now is paperless invoicing and uniform registration guidelines across India to ease compliance burdens.
The Finance Minister reaffirmed the Centre’s commitment to including petrol and diesel under the Goods and Services Tax (GST), emphasising that the states must agree on the tax rate. In the statement that followed the GST Council meeting, Sitharaman highlighted that the groundwork for including petrol and diesel in GST was laid by former Finance Minister Arun Jaitley, and it is now up to the states to finalise the rates. “The intention of the GST, as initiated by Arun Jaitley, was to eventually bring petrol and diesel under GST. The states must now decide on the rate. The intent was clear from the beginning; we want petrol and diesel in GST,” she said. When the GST was rolled out on July 1, 2017, the Centre’s original plan included these fuels under GST, requiring only state agreement on tax rates within the GST Council. The provision is there. Once the states agree, it can be included in the Act.
