The implementation of GST came into reality on 1st July 2017 and brings lots of changes with it. With this, GST brings a finishing on transition provisions, rates or return formats. Many of the people doubted with the success of this brand new tax law and its efficacy. The way the GST committee members have handled all the work is really commendable. Although, many of you will analysis the outcome of the GST framework and its rates.
For both the goods and services, the fixation of the rate is quite expected while maintaining the rates closer to existing indirect tax rates. The idea behind the implementation of the GST is make the business run smooth and the cost for the customers remain reasonable. Several of stakeholders were concern with the complex structure of GST that resulted in multiple rate structures of numerous services and goods. Over the next few years, it is estimated that the rate structure will be increased up to two to three fold.
Some of the sectors like fast-moving consumer goods (FMCG) have duly expressed their high concern on the increasing rate of the goods of mass consumption. Therefore, it is important that it should be addressed and treated properly to maintain the uniformity. Apart from this, there are various sectors like shipping and aviation are also in the circle of concern. These are the sectors where credit rules are required to be twisted so as to avoid any kind of gushing. It has been clearly seen that GST on imports of goods required being free from any kind of exemption so as to avoid significant costs.
Right now, the most controversial issue include that the redressal is required to be around 40% presumptive credit on transition stock. This issue is addressed by the government by elevating the presumptive credit to 60% for goods, which attract GST rates of 18% and above this. This is further maintained to 40% for others. The GST still not able to clarify al the areas, some of them includes area based incentives and state incentives.
As the rates for the good and services are finalized, the focus has been shifted to the anti-profiteering provisions and pricing. Whenever, we heard of the change in the rates, the expectation of the consumer increases that the positive change will pass to them also. GST brings a transparency with it and avoids any kind of audit or disputes. Despite of this, the change in the return policy too ensures simplification that is welcomed by most of the people.
GST is a modern way to minimize the corruption in the country. Surely, it is not the end of the journey, but a start. It is very clear that GST has become a very big example that shows if different parties work together a big change can be bring in the country. Being how, the GSTN is also in the way and is equally important for most of the stakeholders. The government understands the challenges and brings a solution in the form of GST that is definitely a race against time.