4 Years Since Implementation, Government To Reward Early GST Payers
- ByStartupStory | July 1, 2021
1st July is now being celebrated as GST Day for four years straight. The Goods and Service tax is referred to as a historic reform in the country, and thus the day is celebrated every year. This year on GST day, the Union ministry of finance will issue certificates of appreciation to over 54,000 GST payers for timely filing of returns and a cash payment of the tax, finance minister Nirmala Sitharaman said on Wednesday. The Goods and Services Tax (GST) is an indirect, multi-stage, comprehensive tax in India, imposed on the supply of goods and services. On roll-out, GST subsumed almost all the other domestic indirect taxes (petroleum, alcoholic beverages, and stamp duty are the major exceptions) in the country under one head, and is perhaps the biggest tax reform in the history of independent India. The GST is imposed at every step of the production process but is collected from the point of consumption, refunding all parties eventually other than the final consumer.
Owing to the Covid-19 pandemic, the GST council had temporarily removed the tax on two medicines last month. It also slashed the tax rates on 15 other items such as drugs, medical-grade oxygen, and testing kits to 5%, and reduced the levy on ambulances to 12% for a little over three-and-a-half months to help individuals and governments fight Covid-19 and its fallout.
It remains to be seen, however, how the Covid-19 pandemic and the resulting fiscal tensions continue to affect GST’s future trajectory, especially since India is facing an increase in inequality and deterioration in the quality of employment. Experts predict that this will generate additional headwinds for direct tax collections, increasing the temptation to exploit the indirect tax route.
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