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News:
- The Goods and Service Tax council’s second meeting held recently.
Important facts:
2. This time it refrained from further rate rejigs.
3. Proposal to push digital payments by offering a cash-back to consumers using RuPay cards or the UPI platform have been incorporated in the council’s meeting this time.
4. Now, States will volunteer to run a pilot on these lines and a final decision will be taken after a detailed system-wide evaluation of such incentives.
5. The meeting also focuses on issues facing micro, small and medium enterprises (MSMEs).
6. The government has set up a ministerial group to look into the problems faced by MSMEs since India moved to the GST regime signal that the government is not brushing aside the implementation issues that still trouble smaller players.
7. The new indirect tax regime has expanded India’s tax base and brought more firms into the formal economy, revenues have slipped after peaking in April this year.
8. As per the Moody’s Investor Service, revenue loss from the most recent tax cuts may be 0.04-0.08% of GDP annually.
9. The revenue generated in the first three months of this financial year is short of the revenue target a month for 2018-19.
10. This could be offset by stronger consumption-led growth and better tax compliance.
11. Firms with an annual turnover of less than ₹5 crore constitute 93% of the registered taxpayers under the GST
12. Suggestion:
- Further easing of compliance for micro firms.
- Enhancing the threshold for mandatory use of e-way bills to track movement of taxable goods.
