Taxation

One Month Of GST: Promising Future with Less Hiccups

One Month Of GST: Promising Future with Less Hiccups

Goods and Services Tax – GST was rolled out on July 01, 2017 and it’s been a month now. Take a tour to what happened in this one month. What government promised and what it delivered.

Lots of Confusion in Start but things are going back to Normal

The first few days witnessed lots of confusion but now things are going back to normal. Customers had confusion on the tax that will be charged on particular goods. The most trouble or confusion was faced at restaurants that were offering services. Many claimed that there can’t be any service charges since GST will include all this. Such were the confusions in the mind of people which had been solved in the months’ time.

Tax Slab Changed and Cess Increased

The GST council has increased cess on luxury cars from 15% to 25%. Now the total tax that will be charged is 53% from 43% in the past. This will certainly impact the big brands in motor vehicles and specially their manufacturing in India as they had positive plans in opening manufacturing hubs in India. The GST council introduced a new form GSTR 3B that will be filled before 20th August and 20th September for the month of July and August respectively. GSTR 3B is introduced in order to give some relief to the tax payers as filing all three forms will be time consuming as well as confusing. This provision of filling GSTR 3B will be only for two months and later the three regular forms will be filled for the month of September and onwards.

Record Tax Collection under IGST and record Registration under GST

According to the CBEC, about 26, 500 crore rupees has been collected in the month of July under Integrated GST through import. This figure is 60% higher than the previous tax collections. Last year, only 16, 625 crore rupees were collected in the month of July. One advantage that GST rollout saw was a record number of registrations of businesses under GST. Nearly 12 lakh new businesses have been registered under GST that will certainly give a huge boost to revenue collection and bringing small businesses into mainstream while minimizing tax evasion incidences.

Things going back to Normal

The month of July was volatile but as the august starts, things are going back to normal. There has been a huge boost in sale for Maruti Suzuki that sold cars at a whopping 22% higher than the previous month. The same trend was witnessed in other car companies like Honda. It is likely that the manufacturing market will go back to normal and we can see a jump following the implementation of GST.

As the time passes, the confusions regarding GST will end and the sale of goods and services will rise. Though few markets will suffer due to the implementation process but in the larger context, one can expect GST to be successful bait.

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