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Source: Business Standard
Relevance: GST has completed 4 years, since its implementation.
Goods and Services Tax (GST) marked a new chapter in India’s taxation. It has completed four years. Following are the major highlights of its journey, till now.
Revenue collection: Before April, the monthly collection of GST was ₹ 95,000 crore on average. However, the collection has crossed ₹ 1.4 trillion in April.
GST Council: It is a working model of cooperative federalism between the Centre and states on the matters of GST. It has 2 central government members, 28 members representing states, and 3 members representing union territories with (proposed) legislature.
However, it’s 2 central government members command 33 percent of the total vote. All states together account for 67 percent of the vote. 75 percent of votes are needed to pass a resolution. Thus, the GST council has become a new ground of political tussle.
Rate rationalisation: GST was originally aimed as a simplified tax structure with a lesser number of tax slabs. However, this aim has not been achieved properly.
The 15th Finance Commission recommended merging the 12 percent and 18 percent slabs and rationalising GST into a three-rate structure, complemented by the 5 percent merit rate and 28- 30 percent de-merit rate.
The weighted average rate of GST in India has gradually reduced, from 14.4 percent during the beginning of GST implementation (May 2017) to as low as 11.6 percent in September 2019. These decisions are taken for the political benefit, not a rational basis.
